Nucor Corp. says profit will be less than expected

Nucor Corp., the second-biggest U.S. steelmaker, said fourth-quarter profit will be less than anticipated because of rising inventories and lower prices. The shares plunged the most in five months.

Net income will be $1.05 to $1.15 a share, compared with $341 million, or $1.09 a share, a year earlier, Nucor, based in Charlotte, N.C., said Tuesday in a statement. Analysts expected $1.39, based on the average of 12 estimates in a Bloomberg survey. Third-quarter profit was a record $1.68.

Production and shipments will drop 12 percent to 15 percent from the third quarter, Nucor said. U.S. steel prices fell to a seven-month low in November as automakers cut demand and some buyers delayed orders. Nucor's outlook sparked share declines for producers such as U.S. Steel Corp. and Steel Dynamics Inc.

"This could be a catalyst for the steel bulls to rethink their positive thesis," David Gagliano, an analyst at Credit Suisse in New York, said Tuesday in a note to investors. "Nucor's news is consistent with our cautious view toward the steels, driven by the magnitude of both the inventory and import increases."

Nucor announced in September that it would build a $27 million plant in Brigham City that will employ more than 200 workers. The new facility will produce metal products used in the construction industry and will join three other Nucor operations in Box Elder County: a 340-employee Vulcraft joist plant and connected 30-worker cold finish operation also in Brigham City, plus a bar steel mill in Plymouth.

Shares of Nucor tumbled $4.75, or 7.4 percent, to close at $59.60 Tuesday on the New York Stock Exchange, the biggest drop since July 13. Before Tuesday, Nucor had gained 92 percent in the past year.

Nucor was the biggest decliner among the 14 companies tracked by the Standard & Poor's Supercomposite Steel Index, which plunged 6.1 percent. Steel Dynamics Inc. fell 6.4 percent, while U.S. Steel and Allegheny Technologies Inc. fell more than 5 percent.

"The magnitude of the guidance cut was unexpected" so soon after a record quarter from Nucor, said Michelle Applebaum, head of a steel-research firm in Highland Park, Ill. "It's quite clear that steel prices have come down very quickly."

Nucor Chief Executive Officer Daniel DiMicco, 56, has been investing record earnings into expanding production and boosting cash payments to investors, even as steel inventories and imports gained. Producers such as Arcelor Mittal and U.S. Steel Corp. are paring output to boost prices after imports in the nine months through September gained 45 percent.