Nucor Announces Guidance For Its Third Quarter Earnings
Projected third quarter of 2018 results include an estimated benefit of approximately
In our Form 10-Q for the second quarter of 2018 we stated the following related to the proved producing natural gas well assets impairment assessment we performed in the fourth quarter of 2017: "Changes in the natural gas industry or a continuation of the low price environment beyond what had already been assumed in the analysis could cause management to revise the natural gas price assumptions, the estimated reserves or the estimated drilling production costs. Unfavorable revisions to these assumptions or estimates could possibly result in an impairment of some or all of the groups of proved well assets." In the weeks following the filing of the Form 10-Q for the second quarter of 2018, based on the continued deterioration in the outlook for natural gas pricing, we determined that a triggering event occurred related to the proved producing natural gas well assets requiring assessment for impairment in the third quarter. While we are still in the process of performing our impairment analysis, we believe that it is likely that we will record an impairment charge in the third quarter of 2018 due to the impact on our impairment valuation model of the continuation of the low price environment beyond our best estimates utilized in our most recent impairment test. We cannot estimate the amount of any potential impairment charge at this time, and, therefore, have not included an estimate in the above guidance range.
Earnings in the third quarter of 2018 are expected to continue the trend of strong 2018 performance. We continue to believe there is sustainable strength in steel end use markets. We expect the performance of our steel mills segment in the third quarter of 2018 to increase compared to the second quarter of 2018 due primarily to higher earnings at our sheet mills and plate mills, despite the impact of both planned and weather-related outages at certain mills. The earnings of the steel products segment are expected to decrease in the third quarter of 2018 as compared to the second quarter of 2018. We expect our raw materials segment's earnings in the third quarter of 2018 to be lower as compared to the second quarter of 2018 due to the decreased performance of our scrap brokerage and processing operations and the decreased performance of our DRI facilities as our Louisiana DRI facility experienced outages for much of the third quarter.
Certain statements contained in this news release are "forward-looking statements" that involve risks and uncertainties. The words "believe," "expect," "project," "will," "should," "could" and similar expressions are intended to identify those forward-looking statements. Factors that might cause the Company's actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: (1) competitive pressure on sales and pricing, including competition from imports and substitute materials; (2) U.S. and foreign trade policies affecting steel imports or exports; (3) the sensitivity of the results of our operations to prevailing steel prices and the changes in the supply and cost of raw materials, including scrap steel; (4) market demand for steel products; and (5) energy costs and availability. These and other factors are discussed in
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