Nucor Guidance Way Below Consensus Estimate (NUE)

Steel-maker Nucor Corp. (NYSE: NUE) released guidance for its first quarter of 2012 that is about 50% less than consensus estimates. The company said that EPS for the first quarter would be $0.30-$0.35 versus a consensus estimate of $0.69. Nucor posted EPS of $0.43 in the fourth quarter.

The company offers a litany of reasons for the lower earnings:

This performance reflects a flattening in the favorable pricing and margin trends for all steel mill products that began mid-quarter and unexpected margin weakness in our raw materials business. The deterioration in steel mill pricing and margin trends as compared to our expectations is due to resurgence in imports and increased competition from new domestic sheet mill supply. In addition to increased competitive pricing pressure, a seasonally atypical reduction in raw material costs, for both scrap and iron ore, contributed to buyer uncertainty and negatively impacted steel mill consumer buying patterns.

Nucor also sees a silver lining:

Despite the negative impact of excess supply, market demand continues to improve in most end markets including the construction products markets, and we believe that we have reached a positive turning point in margins. The strongest end markets continue to be in manufactured goods including heavy equipment, energy and automotive.

Shares opened fractionally lower at $43.22, in a 52-week range of $29.82-$48.00.