CHARLOTTE, N.C., Oct. 23, 2014 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $245.4 million, or $0.76 per diluted share, for the third quarter of 2014. By comparison, Nucor reported net earnings of $147.0 million, or $0.46 per diluted share, in the second quarter of 2014 and net earnings of $147.6 million, or $0.46 per diluted share, in the third quarter of 2013. Third quarter of 2014 diluted net earnings per share of $0.76 was above our guidance range of $0.70 to $0.75 per diluted share due to better than forecasted performance in the steel mills segment partially offset by a larger than expected loss in the raw materials segment.
In the first nine months of 2014, Nucor reported consolidated net earnings of $503.5 million, or $1.57 per diluted share, compared with consolidated net earnings of $317.5 million, or $0.99 per diluted share, in the first nine months of last year.
Nucor's results include a credit of $14.5 million ($0.03 per diluted share) to value inventories using the last-in, first-out (LIFO) method of accounting in the third quarter of 2014, compared with no charge recorded in the second quarter of 2014 and a credit of $18.0 million ($0.03 per diluted share) recorded in the third quarter of 2013. As a result, the LIFO charges and credits netted to zero in the first nine months of 2014 and the first nine months of 2013. Included in the third quarter results is a $12.5 million charge ($0.03 per diluted share) related to the partial write down of assets within the steel mills segment. Earnings in the third quarter of 2013 included 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.
Nucor's consolidated net sales increased 8% to $5.70 billion in the third quarter of 2014 compared with $5.29 billion in the second quarter of 2014 and increased 15% compared with $4.94 billion in the third quarter of 2013. Average sales price per ton increased 1% over the second quarter of 2014 and increased 5% over the third quarter of 2013. Total tons shipped to outside customers were 6,784,000 tons in the third quarter of 2014, a 6% increase over the second quarter of 2014 and an increase of 10% over the third quarter of 2013. Total third quarter steel mill shipments increased 5% over the second quarter of 2014 and 7% over the third quarter of 2013. Third quarter downstream steel products shipments to outside customers increased 9% over the second quarter of 2014 and increased 18% over the third quarter of 2013.
In the first nine months of 2014, Nucor's consolidated net sales increased 14% to $16.10 billion, compared with $14.16 billion in last year's first nine months. Total tons shipped to outside customers increased 9% from the first nine months of 2013, while average sales price per ton increased 4%.
The average scrap and scrap substitute cost per ton used in the third quarter of 2014 was $379, a 1% decrease from $384 in the second quarter of 2014 and an increase of 2% over $372 in the third quarter of 2013. The average scrap and scrap substitute cost per ton used in the first nine months of 2014 was $387, an increase of 3% over $376 in the first nine months of 2013.
Overall operating rates at our steel mills increased to 81% in the third quarter of 2014 as compared with 79% in the second quarter of 2014 and 78% in the third quarter of 2013. Steel mill utilization increased to 78% in the first nine months of 2014 from 74% in the first nine months of 2013.
Total steel mill energy costs in the third quarter of 2014 increased approximately $1 per ton compared with the second quarter of 2014 and the third quarter of 2013. Energy costs for the first nine months of 2014 increased approximately $2 per ton over the first nine months of 2013 due to increased natural gas and electricity unit costs.
Cash and cash equivalents and short-term investments totaled $1.40 billion as of the end of the third quarter of 2014. After the quarter ended, Nucor closed on its purchase of all the equity of Gallatin Steel Company for approximately $770 million, which was paid for in cash. Subsequent to the end of the third quarter, Nucor issued approximately $300 million of commercial paper to help fund the Gallatin transaction. Nucor's liquidity position remains strong after the acquisition, and our undrawn $1.5 billion revolving credit facility does not expire until August 2018.
In September, Nucor's board of directors declared a cash dividend of $0.37 per share payable on November 10, 2014 to stockholders of record on September 30, 2014. This dividend is Nucor's 166(th) consecutive quarterly cash dividend, a record we expect to continue.
Overall operating performance at our steel mills segment for the third quarter was much improved compared to the second quarter of 2014 due to increased profitability in sheet, structural, bar and plate steel. Structural steel had no major outages in the third quarter, as compared to the planned three week outage at Nucor-Yamato Steel in the second quarter associated with our $115 million sheet piling capital project. The strongest markets for the steel mills continue to be manufactured goods, including energy and automotive. Though third quarter results are much improved from the second quarter, imports remain at high levels, applying downward pressure on pricing.
Our fabricated construction products businesses (rebar fabrication, joist and decking and pre-engineered metal buildings) also generated much stronger profits compared to the second quarter of 2014. This performance reflects improving conditions in the nonresidential construction markets, although nonresidential construction markets remain at historically low levels.
The performance of our raw materials segment during the third quarter of 2014 includes an operating loss of more than $45 million (approximately $0.09 per diluted share) at our new direct reduced iron (DRI) plant in St. James Parish, Louisiana. The Louisiana DRI facility has continued to achieve excellent quality and volume levels. Production outages in June, July and September were necessary to implement changes intended to improve consistency in the production process and material yield performance. An additional factor affecting the performance of Nucor Steel Louisiana is the impact of consuming higher cost iron ore purchased early in the year under a quarterly lag pricing mechanism. As a result of the process improvements and lower iron ore costs, combined with a steady run-rate, we expect significant improvement in the performance of the Louisiana DRI facility in the fourth quarter and profitable results during the first quarter of 2015.
We currently expect to see a moderate decrease in earnings for the fourth quarter of 2014. The profitability of the steel mills and downstream products segments is expected to be impacted by end of year seasonality that is typical in the fourth 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, 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 third quarter results on October 23, 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 Nine Months (39 Weeks) Ended ----------------------------- ---------------------------- October 4, 2014 Sept. 28, 2013 Percentage Change October 4, 2014 Sept. 28, 2013 Percentage Change --------------- -------------- ----------------- --------------- -------------- ----------------- Steel mills production 5,412 5,202 4% 15,930 14,912 7% Steel mills total shipments 5,741 5,359 7% 16,650 15,459 8% Sales tons to outside customers: Steel mills 4,851 4,640 5% 14,097 13,248 6% Joist 128 86 49% 317 248 28% Deck 113 90 26% 301 242 24% Cold finished 129 113 14% 400 359 11% Fabricated concrete reinforcing steel 342 305 12% 902 813 11% Other 1,221 932 31% 3,326 2,801 19% 6,784 6,166 10% 19,343 17,711 9% ===== ===== ====== ======
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) -------------------------------------------------------- (In thousands, except per share data) Three Months (13 Weeks) Ended Nine Months (39 Weeks) Ended ----------------------------- ---------------------------- Oct. 4, 2014 Sept. 28, 2013 Oct. 4, 2014 Sept. 28, 2013 ------------ -------------- ------------ -------------- Net sales $5,701,869 $4,940,936 $16,101,388 $14,157,296 ---------- ---------- ----------- ----------- Costs, expenses and other: Cost of products sold 5,102,283 4,532,393 14,708,733 13,132,412 Marketing, administrative and other expenses 152,604 125,126 418,851 364,501 Equity in earnings of unconsolidated affiliates (2,352) (2,252) (10,028) (2,665) Interest expense, net 45,349 37,467 130,481 109,186 ------ ------ ------- ------- 5,297,884 4,692,734 15,248,037 13,603,434 --------- --------- ---------- ---------- Earnings before income taxes and noncontrolling interests 403,985 248,202 853,351 553,862 Provision for income taxes 129,784 70,087 282,519 158,749 ------- ------ ------- ------- Net earnings 274,201 178,115 570,832 395,113 Earnings attributable to noncontrolling interests 28,754 30,518 67,313 77,582 ------ ------ ------ ------ Net earnings attributable to Nucor stockholders $245,447 $147,597 $503,519 $317,531 ======== ======== ======== ======== Net earnings per share: Basic $0.76 $0.46 $1.57 $0.99 ===== ===== ===== ===== Diluted $0.76 $0.46 $1.57 $0.99 ===== ===== ===== ===== Average shares outstanding: Basic 320,023 319,341 319,737 318,979 Diluted 320,337 319,526 320,025 319,132
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) ------------------------------------------------ (In thousands) October 4, 2014 Dec. 31, 2013 --------------- ------------- ASSETS Current assets: Cash and cash equivalents $1,295,945 $1,483,252 Short-term investments 100,000 28,191 Accounts receivable, net 2,243,908 1,810,987 Inventories, net 2,683,235 2,605,609 Other current assets 473,156 482,007 Total current assets 6,796,244 6,410,046 Property, plant and equipment, net 4,884,010 4,917,024 Goodwill 1,982,776 1,973,608 Other intangible assets, net 819,078 874,154 Other assets 1,011,486 1,028,451 --------- --------- Total assets $15,493,594 $15,203,283 =========== =========== LIABILITIES Current liabilities: Short-term debt $41,101 $29,202 Long-term debt due within one year 16,300 3,300 Accounts payable 1,113,284 1,117,078 Federal income taxes payable 65,096 - Salaries, wages and related accruals 341,875 282,860 Accrued expenses and other current liabilities 578,840 527,776 Total current liabilities 2,156,496 1,960,216 Long-term debt due after one year 4,360,600 4,376,900 Deferred credits and other liabilities 960,795 955,889 ------- ------- Total liabilities 7,477,891 7,293,005 --------- --------- EQUITY Nucor stockholders' equity: Common stock 151,227 151,010 Additional paid-in capital 1,876,728 1,843,353 Retained earnings 7,287,500 7,140,440 Accumulated other comprehensive (loss) income, net of income taxes (85,341) 9,080 Treasury stock (1,494,832) (1,498,114) Total Nucor stockholders' equity 7,735,282 7,645,769 Noncontrolling interests 280,421 264,509 ------- ------- Total equity 8,015,703 7,910,278 --------- --------- Total liabilities and equity $15,493,594 $15,203,283 =========== ===========
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) ---------------------------------------------------------- (In thousands) Nine Months (39 Weeks) Ended ---------------------------- Oct. 4, 2014 Sept. 28, 2013 ------------ -------------- Operating activities: Net earnings $570,832 $395,113 Adjustments: Depreciation 486,684 390,495 Amortization 54,127 56,051 Stock-based compensation 40,325 40,551 Deferred income taxes (43,712) 10,881 Distributions from affiliates 11,504 7,708 Equity in earnings of unconsolidated affiliates (10,028) (2,665) Loss on assets 21,546 14,000 Changes in assets and liabilities (exclusive of acquisitions and dispositions): Accounts receivable (418,353) (204,540) Inventories (80,975) (129,280) Accounts payable 84,161 122,520 Federal income taxes 94,999 70,210 Salaries, wages and related accruals 65,027 12,796 Other operating activities 49,426 99,800 ------ ------ Cash provided by operating activities 925,563 883,640 ------- ------- Investing activities: Capital expenditures (557,249) (887,929) Investment in and advances to affiliates (94,128) (64,762) Repayment of advances to affiliates 26,500 42,000 Disposition of plant and equipment 18,748 29,328 Acquisitions (net of cash acquired) (38,466) - Purchases of investments (100,000) (19,349) Proceeds from the sale of investments 27,529 73,428 Proceeds from the sale of restricted investments - 148,725 Changes in restricted cash - 126,045 Other investing activities - 4,862 ---------------- Cash used in investing activities (717,066) (547,652) -------- -------- Financing activities: Net change in short- term debt 11,900 8,331 Proceeds from long-term debt, net of discount - 999,100 Repayment of long- term debt (3,300) (250,000) Bond issuance costs - (7,625) Issuance of common stock 4,465 - Excess tax benefits from stock-based compensation 3,200 2,100 Distributions to noncontrolling interests (51,401) (63,318) Cash dividends (356,230) (353,155) Other financing activities (1,651) 110 Cash (used in) provided by financing activities (393,017) 335,543 -------- ------- Effect of exchange rate changes on cash (2,787) (1,484) ------ ------ Increase in cash and cash equivalents (187,307) 670,047 Cash and cash equivalents - beginning of year 1,483,252 1,052,862 --------- --------- Cash and cash equivalents - end of nine months $1,295,945 $1,722,909 ========== ========== Non-cash investing activity: Change in accrued plant and equipment purchases $(98,050) $(30,416) ========================
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SOURCE Nucor Corporation