Nucor profit jumps, but shares slump

CHARLOTTE, N.C. — Nucor Corp., a steelmaker and scrap-metal recycler, said Friday its profit climbed 40 percent in the second quarter.

But its shares tumbled more than 3 percent amid concern about the economic outlook and uncertainty about the company's failure to offer specific earnings guidance for the current quarter.

Nucor has both a Vulcraft steel joint plant and a cold-finish plant in Brigham City and a bar mill in Plymouth.

For the period ending July 1, the Charlotte-based company reported net earnings of $452.8 million, or $1.45 per share, compared to $322.7 million, or $1.01 per share, in the same quarter of 2005. That easily beat the consensus estimate of $1.33 a share by analysts surveyed by Thomson Financial.

But its shares fell $1.69, or 3.4 percent, to close at $48.45 on the New York Stock Exchange.

Two analysts said investors may also be shying away from companies involved in cyclical businesses following recent comments by Federal Reserve Chairman Ben Bernanke that the economy may be slowing.

"By the end of the day (Thursday) everything cyclical" was getting hammered, said Chuck Bradford, a New York-based analyst who follows the steel business.

"NUEs shares are down because of worries about the economy later this year," Chicago-based analyst Michelle Applebaum said.

Another analyst said she believes those worries are misplaced when it comes to Nucor.

"We're expecting strong third-quarter prospects," said Timna Tanners, an analyst with UBS Investment Research in New York. "The market seems to be overly spooked on the economy, on China tightening prospects, on just general concerns with the economy that I don't think have much relevance on steel."

Nucor shares are still closer to the upper end of their 52-week range of $24.50 to $60.30.

Also possibly causing skittishness in the market was a decision by Nucor not to quantify its third-quarter guidance.

On an afternoon conference call, Chairman and CEO Daniel R. DiMicco said the company left out a specific target because it has had to revise its guidance upward repeatedly in recent quarters. From now on, he said, Nucor will offer quantitative guidance midway between quarterly reports.