Biggest U.S. Steelmaker's Profit Wanes as Auto Demand Weakens

(Bloomberg) -- Nucor Corp., the largest U.S. steelmaker, fell after saying its profit waned in the third quarter as prices decreased amid softening in several end markets.

Third-quarter earnings will fall to a range of 75 cents to 80 cents, the Charlotte, North Carolina-based company said Monday in a statement. That compares with $2.13 a year earlier and estimates for profit in the current quarter of $1.03 a share, the average of three analysts surveyed by Bloomberg. The shares slipped 0.9% at 9:31 a.m. in New York.

Performance in the steel mills segment is expected to decrease from the previous quarter “due primarily to lower prices for sheet and plate steel,” Nucor said. “Although we still see stability in most of the end use markets that we serve, there has been some softening in automotive, agricultural products and power transmission markets.”

Steelmakers raised some prices earlier this quarter, but buyers have been slow to accept the increases, underscoring fading optimism more than a year after the introduction of U.S. tariffs meant to bolster the industry.

“Plate was a major headwind in the quarter as prices came down rapidly and heavy discounting on sheet products also likely negatively impacted results versus the expectations,” Curt Woodworth, an analyst at Credit Suisse, said Monday in an email. “Sheet is heavily exposed to automotive, which was weak this quarter, but yes Nucor noted more end markets are slowing.”

To contact the reporters on this story: Steven Frank in Toronto at sfrank9@bloomberg.net;Joe Deaux in New York at jdeaux@bloomberg.net

To contact the editors responsible for this story: Luzi Ann Javier at ljavier@bloomberg.net, Joe Richter, Steven Frank

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