Charlotte based Nucor fourth quarter earnings drop 66 percent

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Posted 11:35AM on Thursday, January 31, 2002

CHARLOTTE, N.C. - Nucor Corp., the country's second-largest steel maker, said Thursday its fourth quarter profits fell by two-thirds as steel prices dropped due to the pressure of foreign imports and the recession. Net earnings for the fourth quarter of 2001 were $26.5 million, or 34 cents a share, compared with $79.8 million, or $1.03 per share, in the same October-to-December period the previous year. The quarterly figures include $20.2 million from the sale of an iron carbide subsidiary. The quarterly profits outstripped Wall Street expectations of 17 cents a share, according to analysts surveyed by Thomson Financial/First Call. Analysts had forecast earnings of $1.28 for the year. Nucor said the composite sales price for a ton of its steel fell by 18 percent in 2001, a slide the company said was due to foreign makers of selling steel below cost in the United States. Slow construction has hurt demand for Nucor products, the company said. The results showed Nucor hasn't been able to avoid an industrywide price slump despite making steel from scrap and using nonunion workers. Nucor's minimills operate in rural locations in Alabama, Arkansas, Indiana, Nebraska, New York, North Carolina, South Carolina, Texas and Utah. A focus on cost-cutting and quality allowed Nucor to return a profit despite the difficult conditions, president and chief executive officer Dan DiMicco said. A federal trade panel in December recommended a range of tariffs and quotas on steel imports, but the proposals fell short of what the beleaguered U.S. industry wanted. The tariffs suggested for 16 steel product lines ranged from 5 percent to 40 percent, with most in the range of 8 percent to 20 percent. Two commissioners also recommended quotas. The U.S. steel industry, which has seen 26 companies file for bankruptcy since 1998, had sought tariffs ranging from 30 percent to 50 percent. Opponents said tariffs will raise prices on consumer products ranging from cars to appliances and could ignite a trade war that would make it harder to sell American steel products abroad. They also say U.S. companies have outdated facilities that make steel production more expensive. For all of 2001, Nucor earned $113 million, or $1.45 per share, compared with $310.9 million, or $3.80 per share, in 2000.