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Press release from PR Newswire

Nucor Reports Results For Third Quarter And Nine Months Of 2013

Thursday, October 17, 2013

Nucor Reports Results For Third Quarter And Nine Months Of 2013

09:00 EDT Thursday, October 17, 2013

CHARLOTTE, N.C., Oct. 17, 2013 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $147.6 million, or $0.46 per diluted share, for the third quarter of 2013. By comparison, Nucor reported net earnings of $85.1 million, or $0.27 per diluted share, in the second quarter of 2013 and net earnings of $110.3 million, or $0.35 per diluted share, in the third quarter of 2012. 

In the first nine months of 2013, Nucor reported consolidated net earnings of $317.5 million, or $0.99 per diluted share, compared with consolidated net earnings of $367.7 million, or $1.15 per diluted share, in the first nine months of last year. 

Third quarter of 2013 earnings were negatively affected by 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 on September 25, 2013.  There were no injuries sustained, and there was no environmental impact. Nucor Steel Louisiana was finishing construction of its new direct reduced iron (DRI) plant on the site and preparing to begin production.  The start-up of operations will now be delayed until the end of the year.

Nucor recorded a credit to value inventories using the last-in, first-out (LIFO) method of accounting of $18.0 million ($0.03 per diluted share) in the third quarter of 2013, compared with no charge or credit recorded in the second quarter of 2013 and a credit of $84.0 million ($0.16 per diluted share) recorded in the third quarter of 2012.  As a result, there is no LIFO charge in the first nine months of 2013, compared with a LIFO credit of $84.0 million ($0.16 per diluted share) in the first nine months of 2012.  Third quarter of 2012 earnings were also affected by non-cash inventory purchase accounting adjustments following the acquisition of Skyline Steel LLC in June of 2012 of $28.2 million ($0.06 per diluted share) and a loss on the sale of assets of Nucor Wire Products Pennsylvania, Inc. of $17.6 million ($0.04 per diluted share).

Nucor's consolidated net sales increased 6% to $4.94 billion in the third quarter of 2013 compared with $4.67 billion in the second quarter of 2013 and increased 3% compared with $4.80 billion in the third quarter of 2012. Average sales price per ton increased slightly from the second quarter of 2013 and decreased 4% from the third quarter of 2012. Total tons shipped to outside customers were 6,166,000 tons in the third quarter of 2013, a 6% increase over the second quarter of 2013 and a 7% increase over the third quarter of 2012.  Total third quarter steel mill shipments increased 6%  over  the  third  quarter  of  2012 and  increased  7%  from  the second quarter of  2013.  Third quarter downstream steel products shipments to outside customers decreased 4% from the third quarter of 2012 and increased 2% over the second quarter of 2013.

In the first nine months of 2013, Nucor's consolidated net sales decreased 5% to $14.16 billion, compared with $14.98 billion in last year's first nine months. Total tons shipped to outside customers increased 1% over the first nine months of 2012, while average sales price per ton decreased 6%.

The average scrap and scrap substitute cost per ton used in the third quarter of 2013 was $372, a decrease of 1% from $377 in the second quarter of 2013 and a decrease of 2% from $380 in the third quarter of 2012. The average scrap and scrap substitute cost per ton used in the first nine months of 2013 was $376, a decrease of 10% from $418 in the first nine months of 2012.

Overall operating rates at our steel mills in the third quarter (78%) were up from the second quarter (73%) and from last year's third quarter (71%).  Year-to-date steel mill utilization decreased from 75% in the third quarter of 2012 to 74% in the third quarter of 2013.

Our liquidity position has improved to $1.77 billion in cash and cash equivalents, short-term investments, and restricted cash at the end of the third quarter, compared with $749.2 million at the end of the second quarter.  During the third quarter, we issued $500.0 million of 4.00% notes due in 2023 and $500.0 million of 5.20% notes due in 2043.  The bond offering effectively refinanced $900.0 million of debt that matured between the fourth quarter of 2012 and the second quarter of 2013.  The weighted average interest rate of the new debt is 35 basis points lower than the retired debt, and the new debt also lengthens our debt maturity profile with its weighted average term to maturity of 20 years.  In addition, our undrawn $1.5 billion revolving credit facility has been amended and restated to extend the maturity date to August 2018.  Cash flows from operations continue to be strong and was $883.6 million through the third quarter of 2013.

In September, Nucor's board of directors declared a cash dividend of $0.3675 per share payable on November 8, 2013 to stockholders of record on September 27, 2013.  This dividend is Nucor's 162nd consecutive quarterly cash dividend, a record we expect to continue.

Our third quarter operating performance in the steel mills segment improved significantly compared with second quarter performance mainly due to better pricing for sheet steel. Sheet steel profitability improved as a result of competitor supply disruptions, customer inventory restocking and some market demand improvement. Structural steel profitability also improved due to Nucor-Yamato Steel's higher production following its 17 day planned outage during the second quarter and customer inventory restocking. It is also worth noting that our fabricated construction products businesses (rebar fabrication, joist and decking, and pre-engineered metal buildings) have had operating profits in five of the last six quarters.

Although we expect stability in metal margins, we typically experience lower shipping volumes in the fourth quarter due to seasonal factors. Additionally, we expect extended planned outages during the fourth quarter at our SBQ mill in Norfolk, Nebraska, our sheet mill in Berkeley County, South Carolina, and our structural mill in Blytheville, Arkansas in preparation for our previously announced capital expansion projects at those facilities.  As a result, we currently expect to see moderately lower earnings for the fourth quarter of 2013.    

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 third quarter results on October 17, 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

Nine Months (39 Weeks) Ended

Sept. 28, 2013

Sept. 29, 2012

Percentage Change

Sept. 28,2013

Sept. 29, 2012

Percentage Change

Steel mills production

5,202

4,819

8%

14,912

15,139

-1%

Steel mills total shipments

5,359

5,043

6%

15,459

15,480

-

Sales tons to outside customers:

Steel mills

4,640

4,313

8%

13,248

13,352

-1%

Joist

86

78

10%

248

217

14%

Deck

90

80

13%

242

221

10%

Cold finished

113

118

-4%

359

388

-7%

Fabricated

concrete reinforcing steel

305

343

-11%

813

915

-11%

Other

932

836

11%

2,801

2,521

11%

6,166

5,768

7%

17,711

17,614

1%

 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)

  Three Months (13 Weeks) Ended  

 Nine Months (39 Weeks) Ended  

Sept. 28, 2013

Sept. 29, 2012

Sept. 28, 2013

Sept. 29, 2012

Net sales

$    4,940,936

$     4,801,206

$      14,157,296

$ 14,977,999

Costs, expenses and other:

  Cost of products sold

4,532,393

4,452,473

13,132,412

13,848,809

  Marketing, administrative      and other expenses

125,126

114,392

364,501

334,039

  Equity in (earnings) losses

of unconsolidated affiliates

(2,252)

2,261

(2,665)

9,093

  Impairment of non-current      assets

-

-

-

30,000

  Interest expense, net

37,467

40,305

109,186

123,028

4,692,734

4,609,431

13,603,434

14,344,969

Earnings before income

taxes and noncontrolling interests

248,202

191,775

553,862

633,030

Provision for income taxes

70,087

61,883

158,749

200,159

Net earnings

178,115

129,892

395,113

432,871

Earnings attributable to

noncontrolling interests

30,518

19,584

77,582

65,160

Net earnings attributable to 

Nucor stockholders

$       147,597

$        110,308

$          317,531

$      367,711

Net earnings per share:

  Basic

$0.46

$0.35

$0.99

$1.15

  Diluted

$0.46

$0.35

$0.99

$1.15

Average shares outstanding:

  Basic

319,341

318,463

318,979

318,042

  Diluted

319,526

318,520

319,132

318,113

 

 CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) 

 (In thousands) 

Sept. 28, 2013

Dec. 31, 2012

 ASSETS 

 Current assets: 

 Cash and cash equivalents 

$    1,722,909

$   1,052,862

 Short-term investments 

48,476

104,167

 Accounts receivable, net 

1,918,165

1,707,317

 Inventories, net 

2,439,847

2,323,641

 Other current assets 

339,480

473,377

 Total current assets 

6,468,877

5,661,364

 Property, plant and equipment, net 

4,697,339

4,283,056

 Restricted cash and investments 

393

275,163

 Goodwill 

1,983,617

2,004,538

 Other intangible assets, net 

896,407

959,240

 Other assets 

1,045,143

968,698

 Total assets 

$  15,091,776

$ 14,152,059

 LIABILITIES 

 Current liabilities: 

 Short-term debt 

$        38,203

$       29,912

 Long-term debt due within one year 

-

250,000

 Accounts payable 

1,137,352

1,046,713

 Salaries, wages and related accruals 

288,730

279,898

 Accrued expenses and other current liabilities 

529,204

423,045

 Total current liabilities 

1,993,489

2,029,568

 Long-term debt due after one year 

4,380,200

3,380,200

 Deferred credits and other liabilities 

854,814

856,917

 Total liabilities 

7,228,503

6,266,685

 EQUITY 

 Nucor stockholders' equity: 

 Common stock 

150,968

150,805

 Additional paid-in capital 

1,841,499

1,811,459

 Retained earnings 

7,088,630

7,124,523

 Accumulated other comprehensive income, 

 net of income taxes 

22,545

56,761

 Treasury stock 

(1,498,436)

(1,501,977)

 Total Nucor stockholders' equity 

7,605,206

7,641,571

 Noncontrolling interests 

258,067

243,803

 Total equity 

7,863,273

7,885,374

 Total liabilities and equity 

$  15,091,776

$ 14,152,059

 

 

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 

 (In thousands) 

Nine Months (39 Weeks) Ended

Sept. 28, 2013

Sept. 29, 2012

Operating activities:

Net earnings 

$               395,113

$               432,871

Adjustments:

Depreciation

390,495

394,690

Amortization

56,051

53,518

Stock-based compensation

40,551

42,858

Deferred income taxes

10,881

(42,548)

Distributions from affiliates

7,708

-

Equity in (earnings) losses of unconsolidated affiliates

(2,665)

9,093

Impairment of non-current assets

-

30,000

Loss on assets

14,000

17,563

Changes in assets and liabilities (exclusive of

     acquisitions and dispositions):

Accounts receivable

(204,540)

62,787

Inventories

(129,280)

41,662

Accounts payable

122,520

21,668

Federal income taxes

70,210

11,248

Salaries, wages and related accruals

12,796

(52,561)

Other

99,800

101,835

Cash provided by operating activities

883,640

1,124,684

Investing activities:

Capital expenditures

(887,929)

(613,777)

Investment in and advances to affiliates

(64,762)

(66,423)

Repayment of advances to affiliates

42,000

32,500

Disposition of plant and equipment

29,328

42,574

Acquisitions (net of cash acquired)

-

(763,657)

Purchases of investments

(19,349)

(409,403)

Proceeds from the sale of investments

73,428

1,341,913

Proceeds from the sale of restricted investments

148,725

209,930

Changes in restricted cash

126,045

(38,301)

Other investing

4,862

-

Cash used in investing activities

(547,652)

(264,644)

Financing activities:

Net change in short-term debt

8,331

28,983

Proceeds from long-term debt, net of discount

999,100

-

Repayment of long-term debt

(250,000)

-

Bond issuance costs

(7,625)

-

Issuance of common stock

-

10,515

Excess tax benefits from stock-based compensation

2,100

4,377

Distributions to noncontrolling interests

(63,318)

(66,562)

Cash dividends

(353,155)

(349,538)

Other financing activities

110

962

Cash provided by (used in) financing activities 

335,543

(371,263)

Effect of exchange rate changes on cash

(1,484)

3,775

Increase in cash and cash equivalents

670,047

492,552

Cash and cash equivalents - beginning of year

1,052,862

1,200,645

Cash and cash equivalents - end of nine months

$            1,722,909

$            1,693,197

Non-cash investing activity:

Change in accrued plant and equipment purchases

$               (30,416)

$                 77,764

SOURCE Nucor Corporation

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

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