CHARLOTTE, N.C., July 18, 2019 /PRNewswire/ -- Nucor
Corporation (NYSE: NUE) today announced consolidated net earnings
of $386.5 million, or $1.26 per diluted share, for the second quarter
of 2019. By comparison, Nucor reported consolidated net earnings of
$501.8 million, or $1.63 per diluted share, for the first quarter of
2019 and $683.2 million, or
$2.13 per diluted share, for the
second quarter of 2018.
Included in the first quarter of 2019 results was a benefit of
$33.7 million, or $0.08 per diluted share, related to the gain on
the sale of an equity method investment in the raw materials
segment. Included in the second quarter of 2018 results was a
benefit of $23.3 million, or
$0.06 per diluted share, related to
insurance recoveries.
In the first half of 2019, Nucor reported consolidated net
earnings of $888.3 million, or
$2.88 per diluted share, compared
with consolidated net earnings of $1.04
billion, or $3.23 per diluted
share, in the first half of last year.
"Unusually wet weather and aggressive supply chain destocking
impacted mill order rates in the first half of 2019. We have seen
lower volumes during the first half of this year resulting in a
more challenging price environment," said John Ferriola, Nucor's Chairman, Chief Executive
Officer and President.
Mr. Ferriola continued, "However, real demand for our products
remains strong in key end-use markets. We see healthy
conditions in end-use markets that typically account for more than
two thirds of our steel shipments. For this reason, we are
cautiously optimistic that pricing has bottomed for most products
and that volumes should be more closely aligned with real end-use
demand in the second half of the year."
Selected Segment Data
Earnings (loss) before income
taxes and noncontrolling interests by segment for the second
quarter and first six months of 2019 and 2018 were as follows (in
thousands):
|
|
Three Months (13
Weeks) Ended
|
|
Six Months (26
Weeks) Ended
|
|
|
June 29,
2019
|
|
June 30,
2018
|
|
June 29,
2019
|
|
June 30,
2018
|
|
|
|
|
|
|
|
|
|
Steel
mills
|
|
$
578,920
|
|
$
961,784
|
|
$
1,268,318
|
|
$
1,522,287
|
Steel
products
|
|
116,084
|
|
155,766
|
|
193,517
|
|
241,580
|
Raw
materials
|
|
21,709
|
|
134,995
|
|
74,932
|
|
209,542
|
Corporate/eliminations
|
|
(182,091)
|
|
(338,844)
|
|
(312,529)
|
|
(543,796)
|
|
|
$
534,622
|
|
$
913,701
|
|
$
1,224,238
|
|
$
1,429,613
|
|
|
|
|
|
|
|
|
|
Financial Review
Nucor's consolidated net sales
decreased 3% to $5.90 billion in the
second quarter of 2019 compared with $6.10
billion in the first quarter of 2019 and decreased 9%
compared with $6.46 billion in the
second quarter of 2018. Average sales price per ton in the second
quarter of 2019 decreased 3% compared with the first quarter of
2019 and decreased 2% compared with the second quarter of 2018. A
total of 6,724,000 tons were shipped to outside customers in the
second quarter of 2019, a 1% decrease from first quarter of 2019
and a 7% decrease from the second quarter of 2018. Total steel mill
shipments in the second quarter of 2019 decreased 3% from the first
quarter of 2019 and decreased 10% from the second quarter of 2018.
Downstream steel products shipments to outside customers in the
second quarter of 2019 increased 2% from the first quarter of 2019
and decreased 4% from the second quarter of 2018.
In the first half of 2019, Nucor's consolidated net sales of
$11.99 billion was similar to
consolidated net sales of $12.03
billion reported in the first half of 2018. Total tons
shipped to outside customers in the first half of 2019 were
13,491,000, a decrease of 5% from the first half of 2018, while the
average sales price per ton increased 5%.
The average scrap and scrap substitute cost per ton used during
the second quarter of 2019 was $330,
a 6% decrease compared to $352 in the
first quarter of 2019 and a decrease of 12% compared to
$373 in the second quarter of 2018.
The average scrap and scrap substitute cost per ton used in the
first half of 2019 was $341, a
decrease of 4% from $355 in the first
half of 2018.
Pre-operating and start-up costs related to the Company's growth
projects were $20.5 million, or
$0.05 per diluted share, in the
second quarter of 2019, compared with $19.6
million, or $0.05 per diluted
share, in the first quarter of 2019 and $5.8
million, or $0.01 per diluted
share, in the second quarter of 2018.
In the first half of 2019, pre-operating and start-up costs
related to the Company's growth projects were $40.1 million, or $0.10 per diluted share, compared with
$8.1 million, or $0.02 per diluted share, in the first half of
2018.
Overall operating rates at the Company's steel mills decreased
to 84% in the second quarter of 2019 as compared to 87% in the
first quarter of 2019 and 95% in the second quarter of 2018.
Operating rates for the first half of 2019 decreased to 85% as
compared to 93% for the first half of 2018.
Nucor's liquidity position remains very strong with $1.48
billion in cash and cash equivalents and short-term
investments as of June 29, 2019.
During the second quarter of 2019, Nucor repurchased
approximately 2.3 million shares of its common stock for an average
price of $55.41 per share. Nucor has
repurchased approximately 3.5 million shares of its common stock
for an average price of $57.25 per
share through the first half of 2019. At June 29,
2019, Nucor had approximately 303,157,000 shares
outstanding and approximately $1.3 billion available
under its share repurchase program.
Second Quarter Highlights
In June 2019, Nucor's board of directors declared a
cash dividend of $0.40 per share
payable on August 9, 2019 to
stockholders of record on June 28,
2019. This dividend is Nucor's 185th consecutive
quarterly cash dividend, a record the Company expects to
continue.
Second Quarter of 2019 Analysis
As expected, earnings
from the Company's steel mills segment in the second quarter of
2019 decreased from the first quarter of 2019 primarily due to the
impact that service center destocking has had on order rates.
Additionally, increased domestic supply and a declining scrap price
environment led to aggressive inventory management by our
customers.
The profitability of the steel products segment improved in the
second quarter of 2019 as compared to the first quarter of 2019,
primarily due to typical seasonal patterns and improved weather
conditions benefiting nonresidential construction markets.
The operating performance of the raw materials segment in the
second quarter of 2019 was similar to the first quarter of 2019.
Our DRI facility in Trinidad had a
planned outage that started on June
19 and ended on July 13.
Third Quarter of 2019 Outlook
The performance of the
raw materials segment is expected to decrease in the third quarter
of 2019 as compared to the second quarter of 2019 due to further
margin compression in the Company's DRI businesses.
The profitability of Nucor's steel products segment is expected
to continue to improve during the third quarter of 2019 as compared
to the second quarter of 2019. Nonresidential construction
market conditions remain strong. In addition, recently
implemented efficiency initiatives in rebar fabrication and metal
buildings are enhancing performance from those businesses.
We expect the performance of the steel mills segment in the
third quarter of 2019 to be lower than this year's second quarter,
due primarily to lower prices for flat rolled and plate
steel. Prices for several key product lines have only
recently reversed the downward trajectory that prevailed during the
first half of the year due to weather conditions and service center
destocking. We expect service center customers will resume more
normal market demand-driven buying patterns during the third
quarter of 2019.
About Nucor
Nucor and its affiliates are
manufacturers of steel and steel products, with operating
facilities in the U.S. 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 / direct reduced iron; 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," "optimistic," "pessimistic," "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)
competitive pressure on sales and pricing, including competition
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 scrap
steel; (4) market demand for steel products; 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 Nucor's 2018 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.
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 first quarter results on
July 18, 2019 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,
2019
|
|
June 30,
2018
|
|
Percentage
Change
|
|
June 29,
2019
|
|
June 30,
2018
|
|
Percentage
Change
|
Steel mills total
shipments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sheet
|
|
2,612
|
|
2,784
|
|
-6%
|
|
5,256
|
|
5,482
|
|
-4%
|
|
Bars
|
|
2,020
|
|
2,374
|
|
-15%
|
|
4,021
|
|
4,616
|
|
-13%
|
|
Structural
|
|
556
|
|
626
|
|
-11%
|
|
1,120
|
|
1,227
|
|
-9%
|
|
Plate
|
|
529
|
|
560
|
|
-6%
|
|
1,135
|
|
1,156
|
|
-2%
|
|
Other
|
|
83
|
|
96
|
|
-14%
|
|
257
|
|
227
|
|
13%
|
|
|
|
5,800
|
|
6,440
|
|
-10%
|
|
11,789
|
|
12,708
|
|
-7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales tons to
outside customers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel
mills
|
|
4,682
|
|
5,078
|
|
-8%
|
|
9,454
|
|
10,094
|
|
-6%
|
|
Joist
|
|
116
|
|
114
|
|
2%
|
|
226
|
|
219
|
|
3%
|
|
Deck
|
|
116
|
|
116
|
|
-
|
|
222
|
|
222
|
|
-
|
|
Cold
finished
|
|
131
|
|
149
|
|
-12%
|
|
274
|
|
296
|
|
-7%
|
|
Fabricated
concrete
|
|
|
|
|
|
|
|
|
|
|
|
|
|
reinforcing
steel
|
|
328
|
|
337
|
|
-3%
|
|
587
|
|
627
|
|
-6%
|
|
Piling
|
|
164
|
|
160
|
|
3%
|
|
302
|
|
286
|
|
6%
|
|
Tubular
products
|
|
245
|
|
286
|
|
-14%
|
|
508
|
|
570
|
|
-11%
|
|
Other
|
|
942
|
|
957
|
|
-2%
|
|
1,918
|
|
1,850
|
|
4%
|
|
|
|
6,724
|
|
7,197
|
|
-7%
|
|
13,491
|
|
14,164
|
|
-5%
|
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
Three
Months (13 Weeks) Ended
|
|
Six Months (26
Weeks) Ended
|
|
|
|
|
|
|
|
|
|
June 29,
2019
|
|
June 30,
2018
|
|
June 29,
2019
|
|
June 30,
2018
|
|
|
|
|
|
|
|
|
Net
sales
|
$
5,895,986
|
|
$
6,460,774
|
|
$
11,992,610
|
|
$
12,029,193
|
|
|
|
|
|
|
|
|
Costs, expenses
and other:
|
|
|
|
|
|
|
|
Cost of
products sold
|
5,120,492
|
|
5,294,184
|
|
10,321,224
|
|
10,136,197
|
Marketing,
administrative and other expenses
|
208,980
|
|
234,381
|
|
389,719
|
|
417,341
|
Equity in
earnings of unconsolidated affiliates
|
(1,138)
|
|
(10,943)
|
|
(4,044)
|
|
(20,523)
|
Interest
expense, net
|
33,030
|
|
29,451
|
|
61,473
|
|
66,565
|
|
5,361,364
|
|
5,547,073
|
|
10,768,372
|
|
10,599,580
|
Earnings before
income taxes and
|
|
|
|
|
|
|
|
noncontrolling
interests
|
534,622
|
|
913,701
|
|
1,224,238
|
|
1,429,613
|
Provision for
income taxes
|
122,345
|
|
200,086
|
|
281,168
|
|
335,886
|
Net
earnings
|
412,277
|
|
713,615
|
|
943,070
|
|
1,093,727
|
Earnings
attributable to
|
|
|
|
|
|
|
|
noncontrolling
interests
|
25,794
|
|
30,462
|
|
54,781
|
|
56,395
|
Net earnings
attributable to
|
|
|
|
|
|
|
|
Nucor
stockholders
|
$
386,483
|
|
$
683,153
|
|
$
888,289
|
|
$
1,037,332
|
|
|
|
|
|
|
|
|
Net earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
1.26
|
|
$
2.14
|
|
$
2.89
|
|
$
3.24
|
Diluted
|
$
1.26
|
|
$
2.13
|
|
$
2.88
|
|
$
3.23
|
|
|
|
|
|
|
|
|
Average shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
305,461
|
|
318,467
|
|
306,017
|
|
318,941
|
Diluted
|
305,952
|
|
319,391
|
|
306,559
|
|
319,930
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 29,
2019
|
|
Dec. 31,
2018
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
1,431,792
|
|
$
1,398,886
|
|
Short-term
investments
|
|
50,000
|
|
-
|
|
Accounts
receivable, net
|
|
2,399,239
|
|
2,505,568
|
|
Inventories,
net
|
|
4,268,799
|
|
4,553,500
|
|
Other
current assets
|
|
317,369
|
|
178,311
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
8,467,199
|
|
8,636,265
|
|
|
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
5,797,513
|
|
5,334,748
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
2,187,825
|
|
2,184,336
|
|
|
|
|
|
|
|
|
Other
intangible assets, net
|
|
786,406
|
|
828,504
|
|
|
|
|
|
|
|
|
Other
assets
|
|
887,537
|
|
936,735
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
18,126,480
|
|
$
17,920,588
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Short-term
debt
|
|
$
60,087
|
|
$
57,870
|
|
Accounts
payable
|
|
1,219,792
|
|
1,428,191
|
|
Salaries,
wages and related accruals
|
|
476,255
|
|
709,397
|
|
Accrued
expenses and other current liabilities
|
|
624,280
|
|
610,842
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
2,380,414
|
|
2,806,300
|
|
|
|
|
|
|
|
|
Long-term
debt due after one year
|
|
4,234,308
|
|
4,233,276
|
|
|
|
|
|
|
|
|
Deferred
credits and other liabilities
|
|
813,750
|
|
679,044
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
7,428,472
|
|
7,718,620
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
Nucor
stockholders' equity:
|
|
|
|
|
|
Common
stock
|
|
152,061
|
|
152,061
|
|
Additional
paid-in capital
|
|
2,098,809
|
|
2,073,715
|
|
Retained
earnings
|
|
10,977,950
|
|
10,337,445
|
|
Accumulated
other comprehensive loss,
|
|
|
|
|
|
net of income
taxes
|
|
(297,760)
|
|
(304,133)
|
|
Treasury
stock
|
|
(2,630,343)
|
|
(2,467,010)
|
|
Total Nucor
stockholders' equity
|
|
10,300,717
|
|
9,792,078
|
|
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
397,291
|
|
409,890
|
|
|
|
|
|
|
|
|
|
Total
equity
|
|
10,698,008
|
|
10,201,968
|
|
|
|
|
|
|
|
|
|
Total
liabilities and equity
|
|
$
18,126,480
|
|
$
17,920,588
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months (26
Weeks) Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 29,
2019
|
|
June 30,
2018
|
|
|
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
|
Net
earnings
|
|
|
$
943,070
|
|
$
1,093,727
|
|
Adjustments:
|
|
|
|
|
|
|
|
Depreciation
|
|
|
321,979
|
|
316,402
|
|
|
Amortization
|
|
|
42,748
|
|
44,573
|
|
|
Stock-based
compensation
|
|
61,260
|
|
51,905
|
|
|
Deferred income
taxes
|
|
57,052
|
|
48,181
|
|
|
Distributions from
affiliates
|
|
27,405
|
|
27,453
|
|
|
Equity in earnings
of unconsolidated affiliates
|
(4,044)
|
|
(20,523)
|
|
|
Changes in assets
and liabilities (exclusive of acquisitions and
dispositions):
|
|
|
|
|
|
|
Accounts
receivable
|
|
112,015
|
|
(602,414)
|
|
|
|
Inventories
|
|
|
281,119
|
|
(676,266)
|
|
|
|
Accounts
payable
|
|
(248,671)
|
|
367,950
|
|
|
|
Federal income
taxes
|
|
(122,358)
|
|
208,996
|
|
|
|
Salaries, wages
and related accruals
|
(220,946)
|
|
1,631
|
|
|
|
Other operating
activities
|
|
(62,774)
|
|
8,977
|
|
|
|
|
|
|
|
|
|
Cash provided by
operating activities
|
|
1,187,855
|
|
870,592
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(649,947)
|
|
(361,486)
|
|
Investment in and
advances to affiliates
|
(11,170)
|
|
(73,427)
|
|
Divestiture of
affiliates
|
|
|
67,591
|
|
-
|
|
Disposition of
plant and equipment
|
|
18,396
|
|
17,297
|
|
Acquisitions (net
of cash acquired)
|
|
(9,495)
|
|
-
|
|
Purchases of
investments
|
|
(50,000)
|
|
-
|
|
Proceeds from the
sale of investments
|
|
-
|
|
50,000
|
|
Other investing
activities
|
|
2,176
|
|
1,378
|
|
|
|
|
|
|
|
|
|
Cash used in
investing activities
|
|
(632,449)
|
|
(366,238)
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
Net change in
short-term debt
|
|
2,217
|
|
6,334
|
|
Proceeds from
long-term debt, net of discount
|
-
|
|
995,710
|
|
Repayments of
long-term debt
|
|
-
|
|
(500,000)
|
|
Bond issuance
related costs
|
|
-
|
|
(7,625)
|
|
Issuance of common
stock
|
|
5,892
|
|
12,280
|
|
Payment of tax
withholdings on certain stock-based compensation
|
(15,446)
|
|
(19,508)
|
|
Distributions to
noncontrolling interests
|
(67,380)
|
|
(40,130)
|
|
Cash
dividends
|
|
|
(246,474)
|
|
(243,649)
|
|
Acquisition of
treasury stock
|
|
(197,511)
|
|
(170,315)
|
|
Other financing
activities
|
|
(4,346)
|
|
(3,879)
|
|
|
|
|
|
|
|
|
|
Cash (used in)
provided by financing activities
|
(523,048)
|
|
29,218
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
|
548
|
|
3,777
|
|
|
|
|
|
|
|
|
|
Increase in cash
and cash equivalents
|
|
32,906
|
|
537,349
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents - beginning of year
|
1,398,886
|
|
949,104
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents - end of three months
|
$
1,431,792
|
|
$
1,486,453
|
|
|
|
|
|
|
|
|
|
Non-cash investing
activity:
|
|
|
|
|
|
|
Change in accrued
plant and equipment purchases and assets recorded
|
|
|
|
|
under capital
lease arrangements
|
|
$
39,862
|
|
$
1,776
|
View original
content:http://www.prnewswire.com/news-releases/nucor-reports-results-for-second-quarter-of-2019-300887073.html
SOURCE Nucor Corporation