Nucor expects the current momentum in the steel market to carry into Q1 2021 as indicated by the company’s lengthening lead times and strong order books. The latest price increases are also positively impacting the steelmaker’s sheet mill operations.
Uncertainty remains over the persistence of the COVID-19 pandemic, which makes it tough for the company to predict upcoming demand trends or industry conditions, Nucor noted in its quarterly earnings guidance.
Nucor’s raw materials segment profit is projected to grow in Q4 2020 compared with Q3 of this year due to better financial results at the company’s DRI facilities that have been gaining profit from increased raw materials prices.
The manufacturer expects its Q4 2020 earnings to surpass the previous quarter due to steel price increases that are benefiting from its sheet and plate mills. The company also sees improved profits at its steel mills because of the strong performance at its bar and structural mills during the quarter.
However, Nucor predicts that its Q4 steel products segment’s earnings will slightly decline against Q3 due to the usual weather pattern impacts.
The company’s expected Q4 2020 earnings contain a net benefit of $39.7mn regarding state tax credits. Nucor’s Q3 earnings included a $16.4mn restructuring charge linked with the company’s metal buildings business adjustments. This followed $66.9mn of non-cash impairment costs in Q4 2019.