Nucor beats profit estimates, backs Trump tariffs

FILE PHOTO: Workers clean up around the steel slab roller line at a steel mill in Farrell, Pennsylvania, U.S., March 9, 2018. REUTERS/Aaron Josefczyk/File Photo

REUTERS – Nucor Corp’s quarterly profit topped Wall Street estimates, and the No. 1 U.S. steelmaker by market value forecast a better second-quarter while praising the U.S. government’s move to impose tariffs on imported steel.

The results come nearly a month after U.S President Donald Trump announced his plan to impose hefty tariffs on imported steel and aluminum to protect American steel and aluminum makers from foreign competition.

Shares in the company fell last week along with other steel firms, as concerns over the prospect of a tit-for-tat trade war with China again dominated trading.

The company did not directly link higher selling prices for its steel and increased shipments in the first quarter, or its forecast, to the imposition of tariffs on foreign competitors in late March.

But its statement followed the upbeat numbers with a reiteration of its support for the moves.

“We are encouraged by recent actions by the government to address the massive flood of dumped and illegally subsidized imports into the United States,” Nucor said.

“Broad-based tariffs with few exceptions are needed to address the historic volume of unfairly traded imports and transshipping that is done to avoid trade duties,” it said.

The move, however, has also provoked a response from China, which published its own list of duties on key U.S. imports earlier this month, including soybeans, planes, cars, whiskey and chemicals.

Nucor’s shares were flat at $65.51 as of last Thursday, while those in U.S. Steel, Steel Dynamics Inc and AK Steel Corp were trading down about 1 percent, dragging the S&P 1500 steel index lower by about 0.2 percent.

“Almost everything today involving steel and aluminum companies depends upon viewpoint of the trade disputes. Fears around trade disputes is affecting everything, because the basic underlying business (for Nucor) is good,” Bradford Research analyst Charles Bradford said.

Average selling prices for Charlotte, North Carolina-based Nucor, which makes sheet steel, beam blanks and bar steel among other products, rose 9 percent in the quarter ended March 31.

Steel mill shipments increased 8 percent in the quarter while shipments to outside customers 15 percent from a year earlier.

The company said it expected profit in the second quarter to increase “significantly” compared to the first quarter.

Net income attributable to shareholders dipped to $354.2 million, or $1.10 per share, in the first quarter, from $356.9 million, or $$1.11 per share, year earlier.

Excluding the write-off of deferred tax assets, the company earned $1.17 a share, beating a consensus estimate of $1.10, according to Thomson Reuters I/B/E/S

Revenue rose 15.6 percent to $5.57 billion, also beating the average estimate of $5.46 billion.