Nucor Reports Results For Second Quarter And First Half Of 2014

24 Jul, 2014, 09:00 ET from Nucor Corporation

CHARLOTTE, N.C., July 24, 2014 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $147.0 million, or $0.46 per diluted share, for the second quarter of 2014. By comparison, Nucor reported net earnings of $111.0 million, or $0.35 per diluted share, in the first quarter of 2014 and net earnings of $85.1 million, or $0.27 per diluted share, in the second quarter of 2013. Second quarter of 2014 diluted net earnings per share of $0.46 was above our guidance range of $0.35 to $0.40 per diluted share due to better than forecasted performance in the steel mills segment.

In the first half of 2014, Nucor reported consolidated net earnings of $258.1 million, or $0.80 per diluted share, compared with consolidated net earnings of $169.9 million, or $0.53 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 2014, compared with a charge of $14.5 million ($0.03 per diluted share) recorded in the first quarter of 2014 and no charge in the second quarter of 2013.  As a result, the LIFO charge in the first half of 2014 was $14.5 million ($0.03 per diluted share), compared with a charge of $18.0 million ($0.03 per diluted share) in the first half of 2013. The second quarter of 2014 included $20.3 million ($0.04 per diluted share) of higher employee stock-based compensation expense than the first quarter of 2014 and was comparable to the second quarter of 2013 due to the timing of annual grants that are typically authorized in June of each year. Included in the first quarter of 2014 earnings was a $12.8 million ($0.04 per diluted share) charge primarily related to tax legislation changes in the state of New York. Also included in first quarter results was a $9.0 million charge ($0.02 per diluted share) related to the disposal of assets within the steel mills segment.

Nucor's consolidated net sales increased 4% to $5.29 billion in the second quarter of 2014 compared with $5.11 billion in the first quarter of 2014 and increased 13% compared with $4.67 billion in the second quarter of 2013. Average sales price per ton increased 1% over the first quarter of 2014 and increased 4% over the second quarter of 2013. Total tons shipped to outside customers were 6,370,000 tons in the second quarter of 2014, a 3% increase over the first quarter of 2014 and an increase of 9% over the second quarter of 2013.  Total second quarter steel mill shipments increased 1% over the first quarter of 2014 and 9% over the second quarter of 2013.  Second quarter downstream steel products shipments to outside customers increased 17% over the first quarter of 2014 and increased 11% over the second quarter of 2013.

In the first half of 2014, Nucor's consolidated net sales increased 13% to $10.40 billion, compared with $9.22 billion in last year's first half. Total tons shipped to outside customers increased 9% from the first half of 2013, while average sales price per ton increased 4%.

The average scrap and scrap substitute cost per ton used in the second quarter of 2014 was $384, a 4% decrease from $398 in the first quarter of 2014 and an increase of 2% over $377 in the second quarter of 2013. The average scrap and scrap substitute cost per ton used in the first half of 2014 was $391, an increase of 3% over $378 in the first half of 2013.

Overall operating rates at our steel mills increased to 79% in the second quarter of 2014 as compared with 75% in the first quarter of 2014 and 73% in the second quarter of 2013. Steel mill utilization increased to 77% in the first half of 2014 from 73% in the first half of 2013.

Total steel mill energy costs in the second quarter of 2014 decreased approximately $3 per ton compared with the first quarter of 2014 and increased $1 per ton over the second quarter of 2013. Energy costs for the first half of 2014 increased $3 per ton over the first half of 2013 due to increased natural gas and electricity unit costs.

Our liquidity position remains strong with $1.17 billion in cash and cash equivalents and short-term investments and an untapped $1.5 billion revolving credit facility that does not expire until August 2018.

In June, Nucor's board of directors declared a cash dividend of $0.37 per share payable on August 11, 2014 to stockholders of record on June 30, 2014. This dividend is Nucor's 165th consecutive quarterly cash dividend, a record we expect to continue.

Second quarter of 2014 earnings increased compared with the first quarter of 2014 due in large part to improved performance by the steel mills segment, particularly at our sheet and bar mills. Sheet steel profitability improved because of higher sales volumes and margin improvement due to continued strong demand and supply disruptions at some of our competitors.  Our bar mills also benefited from higher sales volumes and margin improvement.  Nucor-Yamato Steel underwent a planned three week outage in the second quarter which contributed to decreased volumes for structural steel. The improved results of the steel mills segment were achieved despite imports being at levels not seen since 2006. Our fabricated construction products businesses (rebar fabrication, joist and decking and pre-engineered metal buildings) returned to solid profitability in the second quarter of 2014, reflecting improving conditions in the nonresidential construction markets.

The performance of our raw materials segment decreased in the second quarter of 2014 compared with the first quarter of 2014 due to an operating loss at our new direct reduced iron (DRI) plant in St. James Parish, Louisiana, which was consistent with our guidance. The Louisiana DRI plant underwent a three week outage in the second quarter to implement adjustments that will improve yield and conversion costs. The Louisiana DRI plant has continued to exceed our volume expectations while producing excellent quality DRI units. Also within the raw materials segment, The David J. Joseph Company experienced decreased profitability in the second quarter of 2014 compared to the first quarter of 2014 due to lower scrap selling prices.

We currently expect to see a stronger improvement in earnings for the third quarter of 2014.  Although non-residential construction markets remain at historically low levels, they are improving at a moderate pace.  We therefore expect further increased operating profits in our downstream products businesses.  Steel mill profitability is also expected to improve in the third quarter of 2014 as our Nucor-Yamato Steel division has no planned outage and sheet and plate margins continue to benefit from positive pricing trends.  We also expect improvement in the performance of the Louisiana DRI facility in the third quarter, with profitable performance anticipated by the end of the year. 

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, 2013 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 24, 2014 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 

July 5, 2014

June 29, 2013

Percentage

Change

July 5, 2014

June 29, 2013

Percentage

Change

Steel mills production

5,324

4,892

9%

10,518

9,710

8%

Steel mills total shipments

5,477

5,025

9%

10,909

10,100

8%

Sales tons to outside customers:

Steel mills

4,646

4,274

9%

9,246

8,608

7%

Joist

97

91

7%

189

162

17%

Deck

101

83

22%

188

152

24%

Cold finished

133

124

7%

271

246

10%

Fabricated concrete

reinforcing steel

321

280

15%

560

508

10%

Other

1,072

987

9%

2,105

1,869

13%

6,370

5,839

9%

12,559

11,545

9%

 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)

  Three Months (13 Weeks) Ended  

  Six Months (26 Weeks) Ended  

July 5, 2014

June 29, 2013

July 5, 2014

June 29, 2013

Net sales

$     5,291,075

$     4,665,588

$      10,399,519

$   9,216,360

Costs, expenses and other:

  Cost of products sold

4,875,208

4,352,463

9,606,450

8,600,019

  Marketing, administrative and other expenses

132,813

123,150

266,247

239,375

  Equity in earnings of

unconsolidated affiliates

(3,202)

(1,585)

(7,676)

(413)

  Interest expense, net

44,391

39,228

85,132

71,719

5,049,210

4,513,256

9,950,153

8,910,700

Earnings before income taxes and

noncontrolling interests

241,865

152,332

449,366

305,660

Provision for income taxes

74,930

46,062

152,735

88,662

Net earnings

166,935

106,270

296,631

216,998

Earnings attributable to

noncontrolling interests

19,894

21,125

38,559

47,064

Net earnings attributable to 

Nucor stockholders

$        147,041

$          85,145

$          258,072

$      169,934

Net earnings per share:

  Basic

$0.46

$0.27

$0.80

$0.53

  Diluted

$0.46

$0.27

$0.80

$0.53

Average shares outstanding:

  Basic

319,693

318,903

319,597

318,796

  Diluted

319,981

319,023

319,872

318,934

 

 CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) 

 (In thousands) 

July 5, 2014

Dec. 31, 2013

 ASSETS 

 Current assets: 

 Cash and cash equivalents 

$    1,067,561

$   1,483,252

 Short-term investments 

100,000

28,191

 Accounts receivable, net 

2,071,439

1,810,987

 Inventories, net 

2,738,658

2,605,609

 Other current assets 

517,132

482,007

 Total current assets 

6,494,790

6,410,046

 Property, plant and equipment, net 

4,971,813

4,917,024

 Goodwill 

1,971,452

1,973,608

 Other intangible assets, net 

842,445

874,154

 Other assets 

1,030,388

1,028,451

 Total assets 

$  15,310,888

$ 15,203,283

 LIABILITIES 

 Current liabilities: 

 Short-term debt 

$        42,414

$       29,202

 Long-term debt due within one year 

11,300

3,300

 Accounts payable 

1,124,077

1,117,078

 Salaries, wages and related accruals 

276,660

282,860

 Accrued expenses and other current liabilities 

562,775

527,776

 Total current liabilities 

2,017,226

1,960,216

 Long-term debt due after one year 

4,368,900

4,376,900

 Deferred credits and other liabilities 

978,749

955,889

 Total liabilities 

7,364,875

7,293,005

 EQUITY 

 Nucor stockholders' equity: 

 Common stock 

151,172

151,010

 Additional paid-in capital 

1,867,948

1,843,353

 Retained earnings 

7,160,952

7,140,440

 Accumulated other comprehensive (loss) income, 

 net of income taxes 

(3,952)

9,080

 Treasury stock 

(1,495,298)

(1,498,114)

 Total Nucor stockholders' equity 

7,680,822

7,645,769

 Noncontrolling interests 

265,191

264,509

 Total equity 

7,946,013

7,910,278

 Total liabilities and equity 

$  15,310,888

$ 15,203,283

 

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 

 (In thousands) 

Six Months (26 Weeks) Ended

July 5, 2014

June 29, 2013

Operating activities:

Net earnings 

$               296,631

$               216,998

Adjustments:

Depreciation

326,429

258,390

Amortization

36,265

37,575

Stock-based compensation

33,752

34,043

Deferred income taxes

(5,121)

12,304

Distributions from affiliates

11,504

7,708

Equity in earnings of unconsolidated affiliates

(7,676)

(413)

Loss on assets

9,046

-

Changes in assets and liabilities (exclusive of

     acquisitions and dispositions):

Accounts receivable

(249,196)

(70,785)

Inventories

(130,463)

36,087

Accounts payable

90,460

(44,724)

Federal income taxes

14,100

3,709

Salaries, wages and related accruals

(1,672)

(35,332)

Other

19,270

29,414

Cash provided by operating activities

443,329

484,974

Investing activities:

Capital expenditures

(446,798)

(621,306)

Investment in and advances to affiliates

(68,491)

(43,485)

Repayment of advances to affiliates

15,000

30,500

Disposition of plant and equipment

12,858

10,145

Acquisitions (net of cash acquired)

(38,466)

-

Purchases of investments

(100,000)

(19,390)

Proceeds from the sale of investments

27,529

73,428

Proceeds from the sale of restricted investments

-

148,725

Changes in restricted cash

-

55,355

Cash used in investing activities

(598,368)

(366,028)

Financing activities:

Net change in short-term debt

13,212

1,796

Repayment of long-term debt

-

(250,000)

Excess tax benefits from stock-based compensation

2,700

1,700

Distributions to noncontrolling interests

(37,877)

(57,266)

Cash dividends

(237,369)

(235,280)

Other financing activities

(1,123)

109

Cash used in financing activities 

(260,457)

(538,941)

Effect of exchange rate changes on cash

(195)

(2,400)

Decrease in cash and cash equivalents

(415,691)

(422,395)

Cash and cash equivalents - beginning of year

1,483,252

1,052,862

Cash and cash equivalents - end of six months

$            1,067,561

$               630,467

Non-cash investing activity:

Change in accrued plant and equipment purchases

$               (96,023)

$               (20,537)

 

SOURCE Nucor Corporation



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