Nucor Corporation announced Tuesday guidance for its fourth quarter ending December 31, 2013. Nucor expects fourth quarter results to be in the range of $0.35 to $0.40 per diluted share.This range represents a decrease from both third quarter of 2013 earnings of $0.46 per diluted share and fourth quarter of 2012 earnings of $0.43 per diluted share.
A factor that significantly affected earnings in the third quarter of 2013 was a net $14.0 million ($0.03 per diluted share) partial write down of inventory and fixed asset balances associated with the collapse of a storage dome at Nucor Steel Louisiana in St. James Parish. Also affecting earnings in the fourth quarter of 2012 was a non-cash charge of $12.0 million ($0.02 per diluted share) related to inventory purchase accounting adjustments following the acquisition of Skyline Steel LLC in June of 2012.
Operating performance before LIFO expense for the fourth quarter of 2013 is expected to be similar to the third quarter of 2013.Sheet steel profitability has continued to improve in spite of the three week planned outage at the sheet mill in Berkeley County, South Carolina.The increased sheet steel performance in the second half of 2013 is due to a series of pricing increases that began late in the second quarter that were supported by competitor supply disruptions and slightly improved demand.The improvement in sheet steel is partially offset by decreased performance at our bar and structural steel mills. Lower operating performance at the bar and structural mills is mainly due to extended planned outages during the fourth quarter while key components of some of major capital projects are being installed at the SBQ mill in Norfolk, Nebraska and the structural mill in Blytheville, Arkansas. The raw materials segment is expected to report weaker results in the fourth quarter due mainly to increased start-up costs at our new Direct Reduced Iron (DRI) plant in Louisiana and additional costs incurred as a result of the storage dome collapse in September.The Louisiana DRI facility is expected to start production by the end of the year.
Additionally, the statement announced that Nucor and Encana Oil & Gas (USA) Inc. (Encana), the company's partner in our natural gas working interest drilling program, have agreed to temporarily suspend drilling new natural gas wells.This joint decision is being made due to the current weak natural gas pricing environment.Cessation of drilling will reduce Nucor's capital expenditures for 2014 by approximately $400 million.
