By Dave Sebastian
Nucor Corp.'s (NUE) profit dropped in the latest quarter as sales slid, driven by declines in plate and sheet shipments, though results surpassed Wall Street expectations.
The steel manufacturer said its third-quarter net income was $275 million, or 90 cents a share, down from $676.7 million, or $2.13 a share, in the comparable quarter last year. Analysts polled by FactSet were expecting 83 cents a share. It had guided profit to be between 75 cents and 80 cents a share in the third quarter.
Sales for the quarter declined to $5.46 billion from $6.74 billion in the prior year. Analysts expected $5.54 billion.
Nucor shipped 6.56 million tons to customers in the third quarter, a 7% drop from a year earlier. Average steel scrap prices fell 20% to $299 a ton from the year earlier.
Plate shipments during the quarter declined 26%, while sheet shipments fell 3%. Nucor said plate and sheet market conditions softened, and excess inventory in the supply chain has led its customers to destock.
The company's raw-materials segment recorded a loss of $10.6 million, compared with a loss of $29.1 million a year ago. Nucor said the segment's operating performance decreased due to margin compression in the company's direct reduced iron business, whose facility in Louisiana began a planned outage in early September and is expected to last until mid-November, thus affecting fourth-quarter results.
Nucor said it expects earnings to decrease in the fourth quarter compared with the third quarter, as lower steel prices at the end of the latest quarter would hurt results. The company also sees profitability in the steel-products segment decreasing in the fourth quarter compared with the latest quarter due to year-end seasonality.
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(END) Dow Jones Newswires
October 22, 2019 08:38 ET (12:38 GMT)Copyright (c) 2019 Dow Jones & Company, Inc.