Nucor Corp.'s 2Q profit more than doubles

AP News
Posted: Jul 21, 2011 12:14 PM
Nucor Corp.'s 2Q profit more than doubles

Steel manufacturer Nucor Corp. said Thursday that its second-quarter earnings jumped as a 22 percent increase in sales helped offset higher costs. But it cautioned that stiffer competition could affect its third-quarter performance.

For the quarter that ended July 2, Nucor reported net income of $299.8 million, or 94 cents a share, compared with $91 million, or 29 cents a share, in the year-ago quarter.

It recorded a one-time charge of $32 million related to inventory accounting methods in the most recent quarter.

Revenue rose to $5.11 billion from $4.2 billion in the second quarter of 2010.

Analysts surveyed by FactSet had predicted earnings of 82 cents per share on revenue of $5.13 billion.

Shares of Nucor rose 65 cents, or 1.6 percent, to $40.45 in midday trading.

Nucor said the average sales price per ton increased 21 percent from the year-ago quarter. Total steel mill shipments rose 6 percent from the second-quarter of 2010 but fell 6 percent from the first quarter.

The Charlotte, N.C., company also paid more for energy and scrap metal used in its manufacturing process as production costs rose 14 percent from a year ago. Pre-operating and startup costs of new facilities totaled $31.4 million.

The company said price increases for steel mill products helped offset higher raw material costs during the quarter as demand improved from many customers, including auto and heavy equipment manufacturers, energy producers and general manufacturers.

"However, new domestic supply in the sheet market and increases in imports of sheet steel have begun to put significant pressure on prices and margins," the company said in a statement.

Without changes in market dynamics, "we expect third-quarter results to be lower than second quarter but by how much remains to be seen," the company said.