CHARLOTTE, N.C., Oct. 22, 2019 /PRNewswire/ -- Nucor
Corporation (NYSE: NUE) today announced consolidated net earnings
of $275.0 million, or $0.90 per diluted share, for the third quarter of
2019. By comparison, Nucor reported consolidated net earnings of
$386.5 million, or $1.26 per diluted share, for the second quarter
of 2019 and $676.7 million, or
$2.13 per diluted share, for the
third quarter of 2018. Included in the third quarter of 2018
earnings is a non-cash impairment charge of $110.0 million, or $0.26 per diluted share, related to our proved
producing natural gas well assets, as well as a benefit of
$24.8 million, or $0.06 per diluted share, related to insurance
recoveries.
In the first nine months of 2019, Nucor reported consolidated
net earnings of $1.16 billion, or
$3.78 per diluted share, compared
with consolidated net earnings of $1.71
billion, or $5.35 per diluted
share, in the first nine months of 2018.
"After a brief summer rally, plate and sheet market conditions
softened in the third quarter. Excess inventory throughout the
supply chain has resulted in continued destocking by our customers.
However, spending in the nonresidential construction market
remained at healthy levels during the third quarter, and we
delivered continued strong performance from our metal buildings,
piling, joist and deck divisions; as well as improved performance
in our rebar fabrication divisions," said John Ferriola, Nucor's Chairman and Chief
Executive Officer.
Mr. Ferriola added, "We continue to have great confidence in
Nucor's business fundamentals and long-term strategy. Our strong
cash flow generation through the cycle underscores the benefits of
our low and highly variable cost structure, as well as of our
highly diversified business model. Looking to 2020 and
beyond, Nucor is uniquely well positioned to build on our
competitive advantages and extend our long track record of
shareholder value creation."
Selected Segment Data
Earnings (loss) before income
taxes and noncontrolling interests by segment for the third quarter
and first nine months of 2019 and 2018 were as follows (in
thousands):
|
|
Three Months (13
Weeks) Ended
|
|
|
Nine Months (39
Weeks) Ended
|
|
|
|
Sept. 28,
2019
|
|
|
Sept. 29,
2018
|
|
|
Sept. 28,
2019
|
|
|
Sept. 29,
2018
|
|
Steel
mills
|
|
$
|
309,939
|
|
|
$
|
1,095,360
|
|
|
$
|
1,578,257
|
|
|
$
|
2,617,647
|
|
Steel
products
|
|
|
170,214
|
|
|
|
138,688
|
|
|
|
363,731
|
|
|
|
380,268
|
|
Raw
materials
|
|
|
(10,599)
|
|
|
|
(29,074)
|
|
|
|
64,333
|
|
|
|
180,468
|
|
Corporate/eliminations
|
|
|
(89,215)
|
|
|
|
(282,472)
|
|
|
|
(401,744)
|
|
|
|
(826,268)
|
|
|
|
$
|
380,339
|
|
|
$
|
922,502
|
|
|
$
|
1,604,577
|
|
|
$
|
2,352,115
|
|
Financial Review
Nucor's consolidated net sales
decreased 7% to $5.46 billion in the
third quarter of 2019 compared with $5.90
billion in the second quarter of 2019 and decreased 19%
compared with $6.74 billion in the
third quarter of 2018. Average sales price per ton in the third
quarter of 2019 decreased 5% compared with the second quarter of
2019 and decreased 13% compared with the third quarter of 2018. A
total of 6,555,000 tons were shipped to outside customers in the
third quarter of 2019, a 3% decrease from the second quarter of
2019 and a 7% decrease from the third quarter of 2018. Total steel
mill shipments in the third quarter of 2019 were similar to total
steel mill shipments from the second quarter of 2019 and decreased
8% from the third quarter of 2018. Steel mill shipments to internal
customers represented 21% of total steel mill shipments in the
third quarter of 2019, which compares to 19% in the second quarter
of 2019 and 20% in the third quarter of 2018. Downstream steel
product shipments to outside customers in the third quarter of 2019
increased 5% from the second quarter of 2019 and were similar to
downstream steel product shipments to outside customers in the
third quarter of 2018.
In the first nine months of 2019, Nucor's consolidated net sales
decreased 7% to $17.46 billion,
compared with $18.77 billion in the
first nine months of 2018. Total tons shipped to outside customers
in the first nine months of 2019 were 20,046,000, a decrease of 5%
from the first nine months of 2018, while the average sales price
per ton decreased 2%.
The average scrap and scrap substitute cost per ton used in the
third quarter of 2019 was $299, a 9%
decrease compared to $330 in the
second quarter of 2019 and a decrease of 20% compared to
$374 in the third quarter of 2018.
The average scrap and scrap substitute cost per ton used in the
first nine months of 2019 was $328, a
decrease of 9% from $361 in the first
nine months of 2018.
Pre-operating and start-up costs related to the Company's growth
projects were approximately $28
million, or $0.07 per diluted
share, in the third quarter of 2019, compared with approximately
$21 million, or $0.05 per diluted share, in the second quarter of
2019 and approximately $11 million,
or $0.03 per diluted share, in the
third quarter of 2018.
In the first nine months of 2019, pre-operating and start-up
costs related to the Company's growth projects were approximately
$68 million, or $0.17 per diluted share, compared with
approximately $19 million, or
$0.05 per diluted share, in the first
nine months of 2018.
Overall operating rates at the Company's steel mills decreased
to 83% in the third quarter of 2019 as compared to 84% in the
second quarter of 2019 and 92% in the third quarter of 2018.
Operating rates for the first nine months of 2019 decreased to 85%
as compared to 93% for the first nine months of 2018.
Nucor's liquidity position remains very strong with $1.94
billion in cash and cash equivalents and short-term
investments at September 28, 2019 and
an untapped $1.5 billion revolving
credit facility that does not expire until April 2023.
Third Quarter of 2019 Highlights
In September 2019, Nucor's board of directors
declared a cash dividend of $0.40 per
share payable on November 8, 2019 to
stockholders of record on September 27,
2019. This dividend is Nucor's 186th consecutive
quarterly cash dividend, a record the Company expects to
continue.
Third Quarter of 2019 Analysis
As expected, the
performance of the steel mills segment in the third quarter of 2019
decreased compared to the second quarter of 2019. Plate and sheet
market conditions softened in the third quarter, and excess
inventory throughout the supply chain has resulted in continued
destocking by our customers.
The profitability of the steel products segment in the third
quarter of 2019 improved as compared to the second quarter of 2019,
as nonresidential construction market conditions remained strong.
In addition, efficiency initiatives implemented at our rebar
fabrication and metal buildings operations are enhancing the
performance of those businesses.
The operating performance of the raw materials segment in the
third quarter of 2019 decreased as compared to the second quarter
of 2019 due to further margin compression in the Company's direct
reduced iron (DRI) businesses. In early September, our DRI facility
in Louisiana began a planned
outage that is expected to last until mid-November.
Fourth Quarter of 2019 Outlook
Nucor's earnings in the
fourth quarter of 2019 are expected to decrease as compared to the
third quarter of 2019. We expect earnings in the steel mills
segment to further decrease in the fourth quarter of 2019 from the
third quarter, as lower steel prices at the end of the third
quarter, which we believe have bottomed, impact our fourth quarter
results. The profitability of the steel products segment in the
fourth quarter of 2019 is expected to decrease slightly from the
third quarter of 2019 due to normal year-end seasonality. The
performance of the raw materials segment is expected to decline in
the fourth quarter of 2019 compared to the third quarter of 2019
due to the impact of our Louisiana DRI plant's planned outage
continuing until mid-November – as well as expected further margin
pressure throughout our raw materials businesses.
About Nucor
Nucor and its affiliates are
manufacturers of steel and steel products, with operating
facilities in the United States
and Canada. Products produced
include: carbon and alloy steel -- in bars, beams, sheet and plate;
hollow structural section tubing; electrical conduit; steel piling;
steel joists and joist girders; steel deck; fabricated concrete
reinforcing steel; cold finished steel; precision castings; steel
fasteners; metal building systems; steel grating; and wire and wire
mesh. Nucor, through The David J. Joseph Company, also brokers
ferrous and nonferrous metals, pig iron and hot briquetted iron /
DRI; supplies ferro-alloys; and processes ferrous and nonferrous
scrap. Nucor is North America's
largest recycler.
Forward-Looking Statements
Certain statements
contained in this news release are "forward-looking statements"
that involve risks and uncertainties. The words "believe,"
"expect," "project," "will," "should," "could" and similar
expressions are intended to identify those forward-looking
statements. These forward-looking statements reflect the Company's
best judgement based on current information, and although we base
these statements on circumstances that we believe to be reasonable
when made, there can be no assurance that future events will not
affect the accuracy of such forward-looking information. As such,
the forward-looking statements are not guarantees of future
performance, and actual results may vary materially from the
projected results and expectations discussed in this news release.
Factors that might cause the Company's actual results to differ
materially from those anticipated in forward-looking statements
include, but are not limited to: (1) competitive pressure on sales
and pricing, including pressure from imports and substitute
materials; (2) U.S. and foreign trade policies affecting steel
imports or exports; (3) the sensitivity of the results of our
operations to prevailing steel prices and changes in the supply and
cost of raw materials, including pig iron, iron ore and scrap
steel; (4) market demand for steel products, which, in the case of
many of our products, is driven by the level of nonresidential
construction activity in the United
States; and (5) energy costs and availability. These and
other factors are discussed in Nucor's regulatory filings with the
Securities and Exchange Commission, including those in "Item 1A.
Risk Factors" of Nucor's Annual Report on Form 10-K for the year
ended December 31, 2018. The
forward-looking statements contained in this news release speak
only as of this date, and Nucor does not assume any obligation to
update them, except as may be required by applicable law.
Broadcast of Conference Call
You are invited to listen
to the live broadcast of Nucor's conference call in which
management will discuss Nucor's third quarter results on
October 22, 2019 at 2:00 p.m. eastern time. The conference call will
be available over the Internet at www.nucor.com, under
Investors.
Tonnage
Data
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months (13
Weeks) Ended
|
|
Nine Months (39
Weeks) Ended
|
|
|
Sept. 28,
2019
|
|
Sept. 29,
2018
|
|
Percent
Change
|
|
Sept. 28,
2019
|
|
Sept. 29,
2018
|
|
Percent
Change
|
Steel mills total
shipments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sheet
|
|
2,659
|
|
2,733
|
|
-3%
|
|
7,915
|
|
8,216
|
|
-4%
|
Bars
|
|
2,029
|
|
2,265
|
|
-10%
|
|
6,050
|
|
6,881
|
|
-12%
|
Structural
|
|
562
|
|
595
|
|
-6%
|
|
1,682
|
|
1,822
|
|
-8%
|
Plate
|
|
470
|
|
633
|
|
-26%
|
|
1,605
|
|
1,788
|
|
-10%
|
Other
|
|
68
|
|
67
|
|
1%
|
|
325
|
|
294
|
|
11%
|
|
|
5,788
|
|
6,293
|
|
-8%
|
|
17,577
|
|
19,001
|
|
-7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales tons to
outside customers:
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel
mills
|
|
4,559
|
|
5,031
|
|
-9%
|
|
14,013
|
|
15,125
|
|
-7%
|
Joist
|
|
133
|
|
136
|
|
-2%
|
|
359
|
|
355
|
|
1%
|
Deck
|
|
132
|
|
130
|
|
2%
|
|
354
|
|
352
|
|
1%
|
Cold
finished
|
|
116
|
|
141
|
|
-18%
|
|
390
|
|
437
|
|
-11%
|
Fabricated concrete
reinforcing steel
|
|
342
|
|
324
|
|
6%
|
|
929
|
|
951
|
|
-2%
|
Piling
|
|
160
|
|
152
|
|
5%
|
|
462
|
|
438
|
|
5%
|
Tubular
products
|
|
272
|
|
259
|
|
5%
|
|
780
|
|
829
|
|
-6%
|
Other steel
products
|
|
107
|
|
126
|
|
-15%
|
|
303
|
|
343
|
|
-12%
|
Raw
materials
|
|
734
|
|
749
|
|
-2%
|
|
2,456
|
|
2,382
|
|
3%
|
|
|
6,555
|
|
7,048
|
|
-7%
|
|
20,046
|
|
21,212
|
|
-5%
|
Condensed
Consolidated Statements of Earnings (Unaudited)
|
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months (13
Weeks) Ended
|
|
|
Nine Months (39
Weeks) Ended
|
|
|
|
Sept. 28,
2019
|
|
|
Sept. 29,
2018
|
|
|
Sept. 28,
2019
|
|
|
Sept. 29,
2018
|
|
Net
sales
|
|
$
|
5,464,502
|
|
|
$
|
6,742,202
|
|
|
$
|
17,457,112
|
|
|
$
|
18,771,395
|
|
Costs, expenses
and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products
sold
|
|
|
4,891,991
|
|
|
|
5,452,052
|
|
|
|
15,213,215
|
|
|
|
15,588,249
|
|
Marketing,
administrative and other expenses
|
|
|
159,301
|
|
|
|
234,081
|
|
|
|
549,020
|
|
|
|
651,422
|
|
Equity in
(earnings) losses of unconsolidated affiliates
|
|
|
1,585
|
|
|
|
(13,634)
|
|
|
|
(2,459)
|
|
|
|
(34,157)
|
|
Impairment of
assets
|
|
|
-
|
|
|
|
110,000
|
|
|
|
-
|
|
|
|
110,000
|
|
Interest expense,
net
|
|
|
31,286
|
|
|
|
37,201
|
|
|
|
92,759
|
|
|
|
103,766
|
|
|
|
|
5,084,163
|
|
|
|
5,819,700
|
|
|
|
15,852,535
|
|
|
|
16,419,280
|
|
Earnings before
income taxes and noncontrolling interests
|
|
|
380,339
|
|
|
|
922,502
|
|
|
|
1,604,577
|
|
|
|
2,352,115
|
|
Provision for
income taxes
|
|
|
86,752
|
|
|
|
216,215
|
|
|
|
367,920
|
|
|
|
552,101
|
|
Net
earnings
|
|
|
293,587
|
|
|
|
706,287
|
|
|
|
1,236,657
|
|
|
|
1,800,014
|
|
Earnings
attributable to noncontrolling interests
|
|
|
18,556
|
|
|
|
29,631
|
|
|
|
73,337
|
|
|
|
86,026
|
|
Net earnings
attributable to Nucor stockholders
|
|
$
|
275,031
|
|
|
$
|
676,656
|
|
|
$
|
1,163,320
|
|
|
$
|
1,713,988
|
|
Net earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.90
|
|
|
$
|
2.13
|
|
|
$
|
3.79
|
|
|
$
|
5.37
|
|
Diluted
|
|
$
|
0.90
|
|
|
$
|
2.13
|
|
|
$
|
3.78
|
|
|
$
|
5.35
|
|
Average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
304,637
|
|
|
|
315,913
|
|
|
|
305,553
|
|
|
|
317,928
|
|
Diluted
|
|
|
304,980
|
|
|
|
316,798
|
|
|
|
306,029
|
|
|
|
318,882
|
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
September 28,
2019
|
|
|
December 31,
2018
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,686,365
|
|
|
$
|
1,398,886
|
|
Short-term
investments
|
|
|
249,616
|
|
|
|
-
|
|
Accounts
receivable, net
|
|
|
2,312,366
|
|
|
|
2,505,568
|
|
Inventories,
net
|
|
|
4,072,464
|
|
|
|
4,553,500
|
|
Other current
assets
|
|
|
363,477
|
|
|
|
178,311
|
|
Total current
assets
|
|
|
8,684,288
|
|
|
|
8,636,265
|
|
Property, plant
and equipment, net
|
|
|
5,886,730
|
|
|
|
5,334,748
|
|
Goodwill
|
|
|
2,186,499
|
|
|
|
2,184,336
|
|
Other intangible
assets, net
|
|
|
764,267
|
|
|
|
828,504
|
|
Other
assets
|
|
|
984,481
|
|
|
|
936,735
|
|
Total
assets
|
|
$
|
18,506,265
|
|
|
$
|
17,920,588
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Short-term
debt
|
|
$
|
47,725
|
|
|
$
|
57,870
|
|
Current portion of
long-term debt and finance lease obligations
|
|
|
28,878
|
|
|
|
-
|
|
Accounts
payable
|
|
|
1,310,670
|
|
|
|
1,428,191
|
|
Salaries, wages and
related accruals
|
|
|
539,360
|
|
|
|
709,397
|
|
Accrued expenses
and other current liabilities
|
|
|
659,360
|
|
|
|
610,842
|
|
Total current
liabilities
|
|
|
2,585,993
|
|
|
|
2,806,300
|
|
Long-term debt and
finance lease obligations due after one year
|
|
|
4,287,597
|
|
|
|
4,233,276
|
|
Deferred credits
and other liabilities
|
|
|
771,642
|
|
|
|
679,044
|
|
Total
liabilities
|
|
|
7,645,232
|
|
|
|
7,718,620
|
|
EQUITY
|
|
|
|
|
|
|
|
|
Nucor
stockholders' equity:
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
152,061
|
|
|
|
152,061
|
|
Additional paid-in
capital
|
|
|
2,108,948
|
|
|
|
2,073,715
|
|
Retained
earnings
|
|
|
11,130,172
|
|
|
|
10,337,445
|
|
Accumulated other
comprehensive loss,
net of income taxes
|
|
|
(313,766)
|
|
|
|
(304,133)
|
|
Treasury
stock
|
|
|
(2,628,368)
|
|
|
|
(2,467,010)
|
|
Total Nucor
stockholders' equity
|
|
|
10,449,047
|
|
|
|
9,792,078
|
|
Noncontrolling
interests
|
|
|
411,986
|
|
|
|
409,890
|
|
Total
equity
|
|
|
10,861,033
|
|
|
|
10,201,968
|
|
Total liabilities
and equity
|
|
$
|
18,506,265
|
|
|
$
|
17,920,588
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months (39
Weeks) Ended
|
|
|
|
Sept. 28,
2019
|
|
|
Sept. 29,
2018
|
|
Operating
activities:
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
1,236,657
|
|
|
$
|
1,800,014
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
477,957
|
|
|
|
474,330
|
|
Amortization
|
|
|
64,655
|
|
|
|
66,684
|
|
Stock-based
compensation
|
|
|
74,311
|
|
|
|
65,597
|
|
Deferred income
taxes
|
|
|
76,737
|
|
|
|
54,162
|
|
Distributions from
affiliates
|
|
|
27,405
|
|
|
|
29,325
|
|
Equity in earnings
of unconsolidated affiliates
|
|
|
(2,459)
|
|
|
|
(34,157)
|
|
Impairment of
assets
|
|
|
-
|
|
|
|
110,000
|
|
Changes in assets
and liabilities (exclusive of acquisitions and
dispositions):
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
197,783
|
|
|
|
(615,118)
|
|
Inventories
|
|
|
476,761
|
|
|
|
(644,865)
|
|
Accounts
payable
|
|
|
(180,397)
|
|
|
|
229,552
|
|
Federal income
taxes
|
|
|
(177,405)
|
|
|
|
168,639
|
|
Salaries, wages and
related accruals
|
|
|
(157,317)
|
|
|
|
173,732
|
|
Other operating
activities
|
|
|
5,526
|
|
|
|
23,564
|
|
Cash provided by
operating activities
|
|
|
2,120,214
|
|
|
|
1,901,459
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(984,646)
|
|
|
|
(624,739)
|
|
Investment in and
advances to affiliates
|
|
|
(27,613)
|
|
|
|
(111,540)
|
|
Divestiture of
affiliates
|
|
|
67,591
|
|
|
|
-
|
|
Disposition of
plant and equipment
|
|
|
32,922
|
|
|
|
27,964
|
|
Acquisitions (net
of cash acquired)
|
|
|
(9,495)
|
|
|
|
-
|
|
Purchase of
investments
|
|
|
(249,616)
|
|
|
|
-
|
|
Proceeds from the
sale of investments
|
|
|
-
|
|
|
|
50,000
|
|
Other investing
activities
|
|
|
2,176
|
|
|
|
25,347
|
|
Cash used in
investing activities
|
|
|
(1,168,681)
|
|
|
|
(632,968)
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
Net change in
short-term debt
|
|
|
(10,145)
|
|
|
|
(5)
|
|
Proceeds from
long-term debt, net of discount
|
|
|
-
|
|
|
|
995,710
|
|
Repayment of
long-term debt
|
|
|
-
|
|
|
|
(500,000)
|
|
Bond issuance
related costs
|
|
|
-
|
|
|
|
(7,625)
|
|
Issuance of common
stock
|
|
|
5,892
|
|
|
|
24,102
|
|
Payment of tax
withholdings on certain stock-based compensation
|
|
|
(15,723)
|
|
|
|
(22,123)
|
|
Distributions to
noncontrolling interests
|
|
|
(71,241)
|
|
|
|
(49,494)
|
|
Cash
dividends
|
|
|
(369,270)
|
|
|
|
(364,982)
|
|
Acquisition of
treasury stock
|
|
|
(197,511)
|
|
|
|
(351,392)
|
|
Other financing
activities
|
|
|
(6,538)
|
|
|
|
(5,248)
|
|
Cash used in
financing activities
|
|
|
(664,536)
|
|
|
|
(281,057)
|
|
Effect of exchange
rate changes on cash
|
|
|
482
|
|
|
|
(4,383)
|
|
Increase in cash
and cash equivalents
|
|
|
287,479
|
|
|
|
983,051
|
|
Cash and cash
equivalents - beginning of year
|
|
|
1,398,886
|
|
|
|
949,104
|
|
Cash and cash
equivalents - end of nine months
|
|
$
|
1,686,365
|
|
|
$
|
1,932,155
|
|
Non-cash investing
activity:
|
|
|
|
|
|
|
|
|
Change in accrued
plant and equipment purchases
|
|
$
|
62,700
|
|
|
$
|
40,996
|
|
View original
content:http://www.prnewswire.com/news-releases/nucor-reports-results-for-third-quarter-of-2019-300942537.html
SOURCE Nucor Corporation