Nucor: Recovery will be long and slow

The Charlotte, North Carolina-based steelmaker reported its third consecutive quarterly loss due in part to lower shipments and high-cost raw material inventories at its sheet mills.

Nucor Corporation announced a consolidated net loss of $29.5M for Q3 of 2009, compared to a net loss of $133.3M, in Q2 2009, an improvement of 78%. The results compare to net income of $734M in Q3 2008.

In the first nine months of 2009, Nucor reported a consolidated net loss of $352.5M, compared with net earnings of $1.73bn in the first nine months of 2008. In Q3 2009, Nucor’s consolidated net sales increased 26% to $3.12bn compared with $2.48bn in Q2 2009 and decreased 58% compared with $7.45bn in Q3 2008.

“Apparent demand did increase in the third quarter due to the end of customer de-stocking. However, there has been no meaningful real improvement in end use demand,” said chairman, president and chief executive Dan DiMicco.

“While our fourth quarter results will benefit from significant improvements and raw material costs, our results could be negatively impacted by the potential of lower operating rates in both sheet and bar products,” he said.

Specifically, demand remained extremely weak for fabricated construction products through 2009. Compared with the year-ago period, Nucor’s steel production decreased 50%, steel deck sales declined 40% and metal building volumes fell 53%.

In the fourth quarter, many of its customers’ typically shut facilities for the holidays and could extend those down periods given weak economic conditions.