Lest anyone get too assured by companies going through the normal beat-and-raise cycle of earnings this quarter, Nucor (NYSE:NUE) gave an outlook that could certainly sober up a few giddy investors. Given Nucor's well-earned reputation for honest and shareholder-friendly management (as well, perhaps, as some conservatism), it would seem unwise to just dismiss their concerns out of hand.
The Quarter That Was
Nucor had provided guidance for the third quarter some time before, but results were somewhat disappointing. Nucor reported that sales grew 33% from last year to $4.1 billion (down 1% sequentially), and that was actually a bit above the highest published estimate. While production was basically flat with last year's level, shipments rose 9%. Pricing was also relatively solid, as average sales price per ton increased 20% from last year, while falling 3% on a sequential basis.
The news below the top line was not as good, though. The company saw scrap costs rise from last year (though fall from the second quarter), while power prices were higher as well. All in all, the company ended up reporting operating earnings of 7 cents a share - certainly within the company's guidance range, but below the more optimistic guesses of analysts. Although the company had guided for operating earnings of 5 to 10 cents per share, the range of analyst estimates was 10 to 15 cents.
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