Steelmaker Nucor's profit soars thanks to additions

Steelmaker Nucor Corp. said Thursday that third-quarter earnings nearly doubled, helped by higher sales from recently acquired steel and scrap-metal companies.

The Charlotte company reported profit of $734.6 million, or $2.31 per share, for the quarter. That compares with $381.2million, or $1.29 per share, a year earlier. Quarterly sales jumped 75 percent to a record $7.45 billion from $4.26billion a year ago.

Analysts polled by Thomson Reuters, on average, expected profit of $2.19 per share on revenue of $7.39 billion. Those estimates typically exclude one-time items.

Nucor said its annual capacity for steel products has more than doubled since 2007 to more than 4.5 million tons. Total shipments to outside customers rose to 6.7 million tons, a 16 percent increase over the amount shipped a year earlier.

Nucor, which produces steel from scrap using electric-arc furnaces, said its higher sales and earnings were fueled partly by significant acquisitions made over the past 21 months.

The company declined to provide guidance for its future financial performance, noting difficulties posed by the global economic crisis, but said its full-year outlook was exceptionally strong. “What we can say is that 2008 will be another record year for Nucor and today our competitive position is stronger than ever, both here and globally.”

Nucor said it still believed strongly in long-term global demand for steel used to build infrastructure.

In a note to investors ahead of the earnings report, J.P. Morgan analyst Michael Gambardella wrote: “In North American steel and base metals, we believe Nucor is best positioned to weather the economic downturn.”

The company has a highly variable cost structure, strong cash flow and an impressive balance sheet, he wrote.