Steel producer, Nucor Corporation (NUE) announced the approval of a $115 million plan by Nucor-Yamato Steel Co, a joint venture between Nucor and Yamato Kogyo Co. Ltd., to expand production of hot rolled sheet piling at Nucor's steel mill in Blytheville, Arkansas.
The project is expected to produce lighter and stronger sheet pilings at a lower cost. It will add some new sheet piling sections, which will increase the single sheet width by 22%. These sections are expected to provide the customers with a variety of latest American-made piling solutions. The project is expected to be completed by early 2014.
Nucor's sheet and H-piling products are used in marine, bridge and highway construction, heavy civil construction, storm protection and underground commercial parking.
The innovations are a part of the company’s strategy to enhance its leadership in the steel industry and aimed at meeting the growing needs of the customers. As a part of this strategy, Nucor completed the acquisition of Skyline Steel LLC and its affiliates – a steel-foundation manufacturing and distribution subsidiary of the steel giant ArcelorMittal (MT) – few weeks ago for a total sum of approximately $605 million.
In April 2012, Nucor released its first-quarter 2012 results. The company reported adjusted (excluding special items) earnings of 42 cents per share in the quarter, above the Zacks Consensus Estimate of 40 cents and its own expectation of 30 cents to 35 cents per share. However, profit (as reported) dipped roughly 9% year over year to $145.1 million (or 46 cents a share) from $159.8 million or 50 cents per share a year ago.
Nucor's consolidated net sales increased 5% year over year to $5,072 million in the quarter. The jump in its top line was driven by a 6% increase in average sales price per ton. However, the increase in revenues was not enough to meet the Zacks Consensus Estimate of $5,085 million as a 1% decline in total tons shipped to outside customers weighed on the top line.
Nucor Corp. faces stiff competition from Commercial Metals Co. (CMC) and United States Steel Corp. (X). Currently, the stock holds a short-term Zacks #3 Rank (Hold) and we have a long-term Neutral recommendation on the company.
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