Nucor expects fourth-quarter 2017 results to be in the range of $0.50 to $0.55 per diluted share. This range is a decrease compared to the third quarter of 2017 consolidated net earnings of $0.79 per diluted share and is comparable to the fourth quarter of 2016 earnings of $0.50 per diluted share.
Projected fourth quarter of 2017 results do not contain any estimates related to the impact of the proposed federal tax legislation in the United States. Third quarter of 2017 results included a net benefit totaling $13.2-million, or $0.04 per diluted share, related to tax return true-ups and state credits. Also included in third quarter of 2017 earnings was an expense of $22. -million, or $0.05 per diluted share, related to certain legal matters. Included in the fourth quarter of 2016 results were the effects of a change in estimate related to the cost of certain inventories that resulted in a benefit of $77.6 million ($0.16 per diluted share).
Imports continue to negatively impact the US steel industry. Through the first ten months of 2017, total steel imports have increased an estimated 19.4% compared to the same period last year. Additionally, finished steel imports accounted for an estimated 28% share of the U.S. market in the first ten months of 2017. Along with other domestic steel producers, Nucor continues to pursue trade cases to combat unfairly traded imports. The United States Dept. of Commerce has made several rulings imposing duties on additional steel products since the beginning of the year that are favorable to the domestic steel industry. Recently, the Commerce Department made a preliminary determination that corrosion-resistant and cold-rolled steel from Vietnam that originated in China evaded U.S. anti-dumping and anti-subsidy orders. As a petitioner in the case, Nucor believes the preliminary determination is an important step in fighting efforts to circumvent trade duties. A final determination is expected to be announced in the first quarter of 2018. Nucor is encouraged by the steady progress that it achieved through the prosecution of product and country specific trade cases, although the process is still slower than we feel is appropriate. The company believes this success is due to the overwhelming evidence that our foreign competitors receive support from illegal subsidies.
Nucor wrote: “We are encouraged by market conditions heading into 2018. We see recently announced price increases and the downward trend in imports late in the year from the mid-year peak as factors building positive momentum. The automotive market remains healthy and continues to be a bright spot for Nucor as we grow our penetration of new automotive platforms. Nonresidential construction markets remain stable at a level significantly below peak 2007 levels. Energy markets continue their recovery from the depressed levels experienced in late 2014 and 2015. Heavy equipment and agriculture also continue to show signs of improvement. In general, we are optimistic on expected overall industrial production in 2018.
“We believe overall market demand in the fourth quarter of 2017 has been solid. However, expected fourth quarter of 2017 earnings in the steel mills segment will be negatively impacted by margin compression as the import surge experienced in the summer of 2017 has been working its way through end markets over the last half of the year. This pressure from imports combined with weakness in plate steel have caused us to lower our fourth quarter of 2017 earnings estimate for the steel mills segment. We expect similar results in the steel products segment in the fourth quarter of 2017 compared to the third quarter of 2017.
“Nucor Steel Louisiana experienced an unplanned outage in the fourth quarter of 2017 and resumed operations in early December. However, this outage was shorter than the unplanned outages experienced in the third quarter of 2017. Because of this, we expect earnings of the raw materials segment in the fourth quarter of 2017 to be improved from the third quarter of 2017.”