Steel product manufacturer Nucor Corp. (NUE) reported Thursday that its net profits plunged in the first quarter, hamstrung by lower sales volumes and steel prices, although the nation’s second largest steelmaker by production still managed to top analyst predictions.
Charlotte, North Carolina-based Nucor said it generated $4.55 billion in sales during the first quarter of 2013, down by 10 percent from $5.07 billion in Q1 2012. Net profit for the quarter was $84.4 million, or 26 cents per share, 42 percent lower than $145.1 million, or 46 cents per share, in the year prior quarter.
Wall Street was expecting the company to post earnings of 24 cents per share on $4.54 billion in revenue.
Average sales per down fell by 7 percent compared to last year’s quarter and 2 percent from the fourth quarter 0f 2012. Total tons shipped decreased by 4 percent from Q1 2012 to 5.71 million tons. Compared to the fourth quarter of 2012, though, total tons shipped were up by 4 percent.
Higher electricity costs, coupled with lower production volume, contributed to an increase of 1 percent in total energy costs. Production at Nucor’s steel mills dropped by 8 percent from 5.26 million tons last year to 4.82 million in the latest quarter.
“Overall, our steel mills have not experienced the seasonal improvement in volume and pricing that is typical in the first quarter of the year,” the company said in a statement today. Nucor said that it expects to see some improvement in earnings in the second quarter as a result of better performance in several of its businesses helping to offset weak performance in its sheet steel operations.
The company is still “cautiously optimistic” about non-residential construction in 2013 and said that it continues to be hurt by import levels, and general economic and political uncertainly while manufactured goods, including automotive and energy, remain the strongest end markets.
Heavy rains in Louisiana in the first quarter have delayed the start date of Nucor’s 2.5-million-ton direct reduced iron plant in St. James Parish. Originally, Nucor planned the plant to begin operations in the middle of the year, but now the start date has been pushed back until the third quarter, although it said that construction is progressing. The plant is part of a larger $3.4 billion complex that Nucor intends to build in the area.
Shares of NUE had a nice climb to start the year, rising from around $42.50 to as high as $48.21 in February, but have skidded back to where they ended 2012. In Thursday’s trading action, shares are down only 2 cents at $42.51 halfway through the trading day.
By ROI comparison, Nucor has outperformed US Steel Corp. (X), the largest steel producer in the country in 2013. Shares of X are off by more than 30 percent this year.