CHARLOTTE, N.C. — A slowing economy and competition from foreign imports resulted in a 59 percent drop in second quarter profit, steelmaker Nucor said Thursday.
The Charlotte-based company reported net income for the quarter of $33.3 million, or 43 cents a share, compared with $81.8 million, or 98 cents a share, for the same period last year.
Nucor's sales decreased 11 percent during the quarter to $1.08 billion, compared with $1.21 billion a year ago.
The sales drop was caused by competition with cheaper foreign imports, a decrease in the company's per-ton price and the slowing economy, the company said.
Last year, the average price per ton of steel was $418 and this year it was $333, said Terry Lisenby, Nucor's chief financial officer.
"The U.S. market has really been impacted by imports, and the economy is slowing," Lisenby said.
In the first half, Nucor had a 13 percent drop in sales, from $2.4 billion to $2.1 billion, also caused by a lower price the company was forced to charge. Net earnings for the half were $66 million, or 85 cents a share, compared with $163.3 million, or $1.92 a share, last year.
Lisenby said despite the financial results the company was able to keep its mills operating and set production and shipping records for the periods.
Another cause of decreased earnings was the cost of starting new mills, which increased from $10 million in the second quarter of 2000 to $20 million this year. Nucor is building plants at Chemung, N.Y., and Crawfordsville, Ind.
Nucor bills itself as the largest steel recycler in the United States, with 21 operations in North Carolina, South Carolina, Nebraska, Texas, Utah, New York, Indiana, Arkansas and Alabama.