Nucor Corp., the largest U.S. steelmaker, reported first-quarter earnings that missed analysts’ estimates as demand in the steel-hungry energy and machinery industries continues to languish amid a commodities slump.
Net income rose to $70.8 million, or 22 cents a share, from $67.8 million, or 21 cents a year earlier, the Charlotte-based company said Thursday. That missed the 29-cent average of six estimates compiled by Bloomberg. Sales dropped 16 percent to $3.72 billion.
Nucor is among domestic steelmakers that have idled plants and seen profit tumble as a global commodity slump reverberates through U.S. markets. Plummeting energy prices curtailed drilling and steel-intensive transportation and storage of fuels. Meanwhile, a worldwide mining slowdown has hurt demand for machinery made by companies including Caterpillar Inc., one of Nucor’s largest customers, according to data compiled by Bloomberg.
Nucor said that while the energy, heavy equipment and agricultural markets remained “weak” in the first quarter, its operating performance improved compared to the previous three months, partly because of a small decline in import volumes. The company said it expects earnings in the second quarter to improve “significantly.”
While the price of U.S. hot-rolled steel coil, a benchmark product used in everything from bridges to microwaves, rose in the period, average prices were 24 percent lower than a year earlier. At the same time, U.S. steel mill capacity utilization dropped by 6 percentage points to average about 67 percent.