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Press release from PR Newswire

Nucor Reports Results For Second Quarter And First Half Of 2013

Thursday, July 18, 2013

Nucor Reports Results For Second Quarter And First Half Of 2013

09:00 EDT Thursday, July 18, 2013

CHARLOTTE, N.C., July 18, 2013 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $85.1 million, or $0.27 per diluted share, for the second quarter of 2013. By comparison, Nucor reported net earnings of $84.8 million, or $0.26 per diluted share, in the first quarter of 2013 and net earnings of $112.3 million, or $0.35 per diluted share, in the second quarter of 2012. 

In the first half of 2013, Nucor reported consolidated net earnings of $169.9 million, or $0.53 per diluted share, compared with consolidated net earnings of $257.4 million, or $0.81 per diluted share, in the first half of last year. 

Nucor's results include no charge to value inventories using the last-in, first-out (LIFO) method of accounting in the second quarter of 2013, compared with a charge of $18.0 million ($0.03 per diluted share) recorded in the first quarter of 2013 and a credit of $14.5 million ($0.03 per diluted share) recorded in the second quarter of 2012.  As a result, the LIFO charge in the first half of 2013 was $18.0 million ($0.03 per diluted share), compared with no LIFO charge in the first half of 2012.  Second quarter of 2012 earnings were also affected by non-cash purchase accounting adjustments related to the Skyline acquisition and the elimination of profit associated with our steel mills' sales to Skyline post-acquisition of $8.5 million ($0.02 per diluted share) and a non-cash impairment charge related to our Duferdofin Nucor S.r.l. joint venture of $30.0 million ($0.09 per diluted share).

Nucor's consolidated net sales increased 3% to $4.67 billion in the second quarter of 2013 compared with $4.55 billion in the first quarter of 2013 and decreased 8% compared with $5.10 billion in the second quarter of 2012. Average sales price per ton increased slightly from the first quarter of 2013 and decreased 7% from the second quarter of 2012. Total tons shipped to outside customers were 5,839,000 tons in the second quarter of 2013, a 2% increase over the first quarter of 2013 and a decrease of 1% from the second quarter of 2012.  Total second quarter steel mill shipments decreased 3%  from  the  second  quarter  of  2012 and  were  down  1%  from  the  first  quarter of  2013.  Second quarter downstream steel products shipments to outside customers decreased 4% from the second quarter of 2012 and increased 19% over the first quarter of 2013.

In the first half of 2013, Nucor's consolidated net sales decreased 9% to $9.22 billion, compared with $10.18 billion in last year's first half. Total tons shipped to outside customers decreased 3% from the first half of 2012, while average sales price per ton decreased 7%.

The average scrap and scrap substitute cost per ton used in the second quarter of 2013 was $377, a slight decrease from $379 in the first quarter of 2013 and a decrease of 12% from $427 in the second quarter of 2012. The average scrap and scrap substitute cost per ton used in the first half of 2013 was $378, a decrease of 13% from $436 in the first half of 2012.

Overall operating rates at our steel mills in the second quarter (73%) were up slightly from the first quarter (72%) and decreased from last year's second quarter (76%).  Steel mill utilization decreased from 77% in the first half of 2012 to 73% in the first half of 2013.  

Construction is nearing completion on our 2,500,000-ton DRI facility in Louisiana. We are on schedule for completion of construction and beginning of start-up late in the third quarter of 2013.  

Our liquidity position remains solid with $749.2 million in cash and cash equivalents, short-term investments, and restricted cash and an untapped $1.5 billion revolving credit facility that does not expire until December 2016.  In addition, cash flow from operations continues to be strong and was $485.0 million through the second quarter of 2013.

In June, Nucor's board of directors declared a cash dividend of $0.3675 per share payable on August 9, 2013 to stockholders of record on June 28, 2013.  This dividend is Nucor's 161st consecutive quarterly cash dividend, a record we expect to continue.

Our second quarter operating performance in the steel mills segment was down compared with first quarter performance due mainly to weakness in sheet steel.  Our steel products businesses have seen improvements from last quarter across the board, including joists and deck, building systems and rebar fabrication products.  The steel products segment as a whole returned to solid profitability in the second quarter after a modest loss in the first quarter of 2013.  We also saw significant improvement in our raw materials segment over the first quarter of 2013, due mainly to improved performance from our Trinidad DRI facility that experienced an unplanned 18 day outage last quarter.   

We currently expect to see a modest improvement in earnings for the third quarter of 2013.  We expect to see improvements in sheet steel pricing, which dropped to its lowest level since November 2010 in June but has since begun to slowly rebound.  Margins on sheet steel have followed a similar trend and are slowly recovering from lows in the second quarter.  The automotive and energy markets remain strong, while the construction market remains challenged.  We also expect to see increased earnings from our downstream businesses in the third quarter, continuing the upward trend observed in the second quarter.  Our David J. Joseph operations are expected to benefit from the bottoming of scrap pricing in the second quarter.

Nucor and affiliates are manufacturers of steel products, with operating facilities primarily in the U.S. and Canada. Products produced include: carbon and alloy steel -- in bars, beams, sheet and plate; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; steel grating and expanded metal; and wire and wire mesh. Nucor, through The David J. Joseph Company, also brokers ferrous and nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America's largest recycler.

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.  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) the sensitivity of the results of our operations to prevailing steel prices and the changes in the supply and cost of raw materials, including scrap steel; (2) market demand for steel products; (3) energy costs and availability; and (4) competitive pressure on sales and pricing, including competition from imports and substitute materials.  These and other factors are discussed in Nucor's regulatory filings with the Securities and Exchange Commission, including those in Nucor's December 31, 2012 Annual Report on Form 10-K, Item 1A. Risk Factors.  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.

You are invited to listen to the live broadcast of Nucor's conference call in which management will discuss Nucor's second quarter results on July 18, 2013 at 2:00 p.m. eastern time. The conference call will be available over the Internet at www.nucor.com, under Investor Relations.

 

 TONNAGE DATA 

 (in thousands) 

 Three Months (13 Weeks) Ended 

 Six Months (26 Weeks) Ended 

June 29, 2013

June 30, 2012

Percentage Change

June 29, 2013

June 30, 2012

Percentage Change

Steel mills production

4,892

5,061

-3%

9,710

10,320

-6%

Steel mills total shipments

5,025

5,202

-3%

10,100

10,437

-3%

Sales tons to outside customers:

Steel mills

4,274

4,449

-4%

8,608

9,039

-5%

Joist

91

75

21%

162

139

17%

Deck

83

76

9%

152

141

8%

Cold finished

124

132

-6%

246

270

-9%

Fabricated concrete

reinforcing steel

280

322

-13%

508

572

-11%

Other

987

871

13%

1,869

1,685

11%

5,839

5,925

-1%

11,545

11,846

-3%

 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)

  Three Months (13 Weeks) Ended  

  Six Months (26 Weeks) Ended  

June 29, 2013

June 30, 2012

June 29, 2013

June 30, 2012

Net sales

$     4,665,588

$     5,104,199

$        9,216,360

$ 10,176,793

Costs, expenses and other:

  Cost of products sold

4,352,463

4,704,269

8,600,019

9,396,336

  Marketing, administrative and other expenses

123,150

112,528

239,375

219,647

  Equity in (earnings) losses of

unconsolidated affiliates

(1,585)

158

(413)

6,832

  Impairment of non-current assets

-

30,000

-

30,000

  Interest expense, net

39,228

41,051

71,719

82,723

4,513,256

4,888,006

8,910,700

9,735,538

Earnings before income taxes and

noncontrolling interests

152,332

216,193

305,660

441,255

Provision for income taxes

46,062

76,626

88,662

138,276

Net earnings

106,270

139,567

216,998

302,979

Earnings attributable to

noncontrolling interests

21,125

27,268

47,064

45,576

Net earnings attributable to 

Nucor stockholders

$          85,145

$        112,299

$          169,934

$      257,403

Net earnings per share:

  Basic

$0.27

$0.35

$0.53

$0.81

  Diluted

$0.27

$0.35

$0.53

$0.81

Average shares outstanding:

  Basic

318,903

317,975

318,796

317,832

  Diluted

319,023

318,040

318,934

317,910

 

 CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) 

 (In thousands) 

June 29, 2013

Dec. 31, 2012

 ASSETS 

 Current assets: 

 Cash and cash equivalents 

$      630,467

$   1,052,862

 Short-term investments 

47,656

104,167

 Accounts receivable, net 

1,767,177

1,707,317

 Inventories, net 

2,279,744

2,323,641

 Other current assets 

458,119

473,377

 Total current assets 

5,183,163

5,661,364

 Property, plant and equipment, net 

4,608,997

4,283,056

 Restricted cash and investments 

71,083

275,163

 Goodwill 

1,983,107

2,004,538

 Other intangible assets, net 

912,708

959,240

 Other assets 

1,007,593

968,698

 Total assets 

$  13,766,651

$ 14,152,059

 LIABILITIES 

 Current liabilities: 

 Short-term debt 

$        31,668

$       29,912

 Long-term debt due within one year 

-

250,000

 Accounts payable 

979,220

1,046,713

 Salaries, wages and related accruals 

240,629

279,898

 Accrued expenses and other current liabilities 

489,059

423,045

 Total current liabilities 

1,740,576

2,029,568

 Long-term debt due after one year 

3,380,200

3,380,200

 Deferred credits and other liabilities 

874,645

856,917

 Total liabilities 

5,995,421

6,266,685

 EQUITY 

 Nucor stockholders' equity: 

 Common stock 

150,962

150,805

 Additional paid-in capital 

1,835,746

1,811,459

 Retained earnings 

7,058,911

7,124,523

 Accumulated other comprehensive (loss) income, 

 net of income taxes 

(9,334)

56,761

 Treasury stock 

(1,498,656)

(1,501,977)

 Total Nucor stockholders' equity 

7,537,629

7,641,571

 Noncontrolling interests 

233,601

243,803

 Total equity 

7,771,230

7,885,374

 Total liabilities and equity 

$  13,766,651

$ 14,152,059

 

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 

 (In thousands) 

Six Months (26 Weeks) Ended

June 29, 2013

June 30, 2012

Operating activities:

Net earnings 

$               216,998

$               302,979

Adjustments:

Depreciation

258,390

260,968

Amortization

37,575

33,122

Stock-based compensation

34,043

37,312

Deferred income taxes

12,304

(23,144)

Equity in (earnings) losses of unconsolidated affiliates

(413)

6,832

Distributions from affiliates

7,708

-

Impairment of non-current assets

-

30,000

Changes in assets and liabilities (exclusive of

     acquisitions and dispositions):

Accounts receivable

(70,785)

(76,245)

Inventories

36,087

(152,494)

Accounts payable

(44,724)

42,394

Federal income taxes

3,709

3,364

Salaries, wages and related accruals

(35,332)

(82,991)

Other

29,414

64,389

Cash provided by operating activities

484,974

446,486

Investing activities:

Capital expenditures

(621,306)

(383,448)

Investment in and advances to affiliates

(43,485)

(57,771)

Repayment of advances to affiliates

30,500

15,000

Disposition of plant and equipment

10,145

21,026

Acquisitions (net of cash acquired)

-

(746,410)

Purchases of investments

(19,390)

(409,403)

Proceeds from the sale of investments

73,428

1,200,153

Proceeds from the sale of restricted investments

148,725

87,115

Changes in restricted cash

55,355

7,078

Cash used in investing activities

(366,028)

(266,660)

Financing activities:

Net change in short-term debt

1,796

5,234

Repayment of long-term debt

(250,000)

-

Issuance of common stock

-

6,156

Excess tax benefits from stock-based compensation

1,700

3,877

Distributions to noncontrolling interests

(57,266)

(52,812)

Cash dividends

(235,280)

(232,766)

Other financing activities

109

670

Cash used in financing activities 

(538,941)

(269,641)

Effect of exchange rate changes on cash

(2,400)

1,159

Decrease in cash and cash equivalents

(422,395)

(88,656)

Cash and cash equivalents - beginning of year

1,052,862

1,200,645

Cash and cash equivalents - end of six months

$               630,467

$            1,111,989

Non-cash investing activity:

Change in accrued plant and equipment purchases

$               (20,537)

$                           -

SOURCE Nucor Corporation

For further information: Nucor Executive Offices, +1-704-366-7000, or fax, +1-704-362-4208

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