NUCOR CORPORATION CHARLOTTE, N.C., July 20, 2017 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $323.0 million, or $1.00 per diluted share, for the second quarter of 2017. By comparison, Nucor reported net earnings of $356.9 million, or $1.11 per diluted share, for the first quarter of 2017 and net earnings of $243.6 million, or $0.76 per diluted share, for the second quarter of 2016.
In the first half of 2017, Nucor reported consolidated net earnings of $679.9 million, or $2.11 per diluted share, compared with consolidated net earnings of $331.2 million, or $1.03 per diluted share, in the first half of last year.
Earnings (loss) before income taxes and noncontrolling interests by segment were as follows for the second quarter and first six months of 2017 and 2016 (in thousands):
Three Months (13 Weeks) Ended Six Months (26 Weeks) Ended
----------------------------- ---------------------------
July 1, 2017 July 2, 2016 July 1, 2017 July 2, 2016
------------ ------------ ------------ ------------
Steel mills $617,366 $530,727 $1,301,527 $811,099
Steel products 45,809 82,946 72,731 125,313
Raw materials 66,227 (27,181) 92,618 (90,553)
Corporate/eliminations (221,266) (196,608) (409,765) (286,412)
$508,136 $389,884 $1,057,111 $559,447
======== ======== ========== ========
Included in the first quarter of 2017 earnings are inventory related purchase accounting charges of $9.8 million, or $0.02 per diluted share, associated with the recent acquisitions of Southland Tube and Republic Conduit.
Nucor's consolidated net sales increased 7% to $5.17 billion in the second quarter of 2017 from $4.82 billion in the first quarter of 2017 and increased 22% compared with $4.25 billion in the second quarter of 2016. Average sales price per ton in the second quarter of 2017 increased 5% from the first quarter of 2017 and increased 17% from the second quarter of 2016. Total tons shipped to outside customers were 6,748,000 tons in the second quarter of 2017, a 2% increase from the first quarter of 2017 and a 5% increase from the second quarter of 2016. Total second quarter steel mill shipments increased 3% from the first quarter of 2017 and increased 7% from the second quarter of 2016. Second quarter of 2017 downstream steel products shipments to outside customers increased 9% from the first quarter of 2017 and increased 1% from the second quarter of 2016.
In the first half of 2017, Nucor's consolidated net sales increased 25% to $9.99 billion, compared with $7.96 billion in last year's first half, and total tons shipped to outside customers increased 6% from the first half of 2016, while average sales price per ton increased 19%.
The average scrap and scrap substitute cost per ton used during the second quarter of 2017 was $313, an increase of 10% from $284 in the first quarter of 2017 and an increase of 35% compared with $232 in the second quarter of 2016. The average scrap and scrap substitute cost per ton used in the first half of 2017 was $298, an increase of 40% from $213 in the first half of 2016.
Overall operating rates at our steel mills increased to 90% in the second quarter of 2017 as compared to 89% in both the first quarter of 2017 and the second quarter of 2016. Operating rates for the first half of 2017 increased to 90% as compared with 84% for the first half of 2016.
Total steel mill energy costs in the second quarter of 2017 were comparable to the first quarter of 2017 and increased approximately $2 per ton compared to the second quarter of 2016, primarily due to higher natural gas unit costs. Total steel mill energy costs for the first half of 2017 also increased $2 per ton compared to the first half of 2016 primarily due to higher natural gas unit costs.
Our liquidity position remains strong with $1.6 billion in cash and cash equivalents and short-term investments, as of July 1, 2017, and an untapped $1.5 billion revolving credit facility that does not expire until April 2021.
In May, Nucor announced that it is investing an estimated $176 million to build a hot band galvanizing and pickling line at its sheet mill in Ghent, Kentucky. The new galvanizing line will expand Nucor Steel Gallatin's product capabilities and should have an annual capacity of 500,000 tons. Once the necessary approvals are obtained, it is expected to take two years to construct the galvanizing line and begin operations.
In June, Nucor's board of directors declared a cash dividend of $0.3775 per share payable on August 11, 2017 to stockholders of record on June 30, 2017. This dividend is Nucor's 177(th) consecutive quarterly cash dividend, a record we expect to continue.
Imports continue to negatively impact the U.S. steel industry. Through the first half of 2017, finished steel imports have increased an estimated 15% compared to the same period last year and account for an estimated 27% share of the U.S. market. The industry continues to pursue trade cases to combat unfairly traded imports. Final determinations issued earlier this year against cut-to-length steel plate imports from twelve countries are having a positive impact as steel imports of these products have decreased in the first six months of this year compared to the same period last year. Last month, the U.S. International Trade Commission made final injury determinations affirming the Department of Commerce's antidumping duties in the steel concrete reinforcing bar (rebar) case against Japan and Turkey, as well as final countervailing duties on rebar imports from Turkey. A final decision regarding Taiwan is still pending. In May, the government determined that there is a reasonable indication that the U.S. steel industry is materially injured or threatened with material injury by reason of carbon and certain alloy steel wire rod imports from ten countries. As a result, the government will continue its wire rod antidumping and countervailing duty investigations, and is expected to issue preliminary duty determinations in the coming months.
The performance of our steel mills segment, particularly of our sheet mills and bar mills, decreased in the second quarter of 2017 as compared to the first quarter of 2017. Market conditions for hot-rolled sheet products have been challenging due to aggressive competition. The profitability of our plate mills improved in the second quarter of 2017 as compared to the first quarter of 2017. The performance of our downstream products segment improved in the second quarter of 2017 as compared to the first quarter of 2017. The profitability of the downstream products segment in the second quarter of 2017 decreased from the second quarter of 2016 due to a highly competitive market environment and margin compression resulting from higher steel prices. In particular, our rebar fabrication operations have experienced significant declines in performance due to downward pressure on pricing caused by surges of rebar imports. Our raw materials segment's performance increased in the second quarter of 2017 as compared to the first quarter of 2017 due to the profitable performance of both of our direct reduced iron facilities.
Earnings in the third quarter of 2017 should be in a range similar to the quarterly results of the first half of 2017. Nonresidential construction indicators, such as the Dodge Momentum Index and Architecture Billings Index, continue to suggest that construction activity will remain healthy through the end of the year. We continue to gain ground in the automotive market and expect to continue that trend through the remainder of the year. We are encouraged by improved energy markets compared to the depressed levels of 2015 and 2016.
In the fourth quarter of 2016, the Company changed its method of accounting for certain inventories from the last-in, first-out (LIFO) method to the first-in, first-out (FIFO) method, which required retrospective application to prior period financial statements. Accordingly, all amounts for prior periods presented in this release are presented after the retrospective application of the change in accounting principle.
Nucor and its 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; hollow structural section tubing; electrical conduit; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; 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 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) competitive pressure on sales and pricing, including competition from imports and substitute materials; (2) 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; (3) market demand for steel products; and (4) 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 fiscal 2016 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 20, 2017 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 1, 2017 July 2, 2016 Percentage July 1, 2017 July 2, 2016 Percentage
Change Change
------ ------
Steel mills total shipments
Sheet 2,719 2,682 1% 5,424 5,250 3%
Tubular products 227 - 450 -
Bars 2,001 1,960 2% 3,958 3,708 7%
Structural 588 596 -1% 1,199 1,197 -
Plate 614 600 2% 1,191 1,154 3%
Other 198 92 115% 272 268 1%
6,347 5,930 7% 12,494 11,577 8%
===== ===== ====== ======
Sales tons to outside customers:
Steel mills 5,322 5,082 5% 10,524 9,981 5%
Joist 104 95 9% 205 193 6%
Deck 104 108 -4% 210 209 -
Cold finished 120 110 9% 242 229 6%
Fabricated concrete
reinforcing steel 291 304 -4% 538 546 -1%
Other 807 758 6% 1,613 1,447 11%
6,748 6,457 5% 13,332 12,605 6%
===== ===== ====== ======
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
--------------------------------------------------------
(In thousands, except per share data)
Three Months (13 Weeks) Ended Six Months (26 Weeks) Ended
----------------------------- ---------------------------
July 1, 2017 July 2, 2016 July 1, 2017 July 2, 2016
------------ ------------ ------------ ------------
Net sales $5,174,769 $4,245,772 $9,989,948 $7,961,348
---------- ---------- ---------- ----------
Costs, expenses and other:
Cost of products sold 4,465,144 3,660,512 8,520,073 7,061,103
Marketing, administrative and other expenses 170,211 161,711 346,637 271,456
Equity in earnings of unconsolidated affiliates (13,302) (6,819) (22,058) (16,064)
Interest expense, net 44,580 40,484 88,185 85,406
------ ------ ------ ------
4,666,633 3,855,888 8,932,837 7,401,901
--------- --------- --------- ---------
Earnings before income taxes and
noncontrolling interests 508,136 389,884 1,057,111 559,447
Provision for income taxes 166,412 118,515 337,739 165,581
------- ------- ------- -------
Net earnings 341,724 271,369 719,372 393,866
Earnings attributable to
noncontrolling interests 18,676 27,749 39,425 62,681
------ ------ ------ ------
Net earnings attributable to
Nucor stockholders $323,048 $243,620 $679,947 $331,185
======== ======== ======== ========
Net earnings per share:
Basic $1.00 $0.76 $2.12 $1.03
Diluted $1.00 $0.76 $2.11 $1.03
Average shares outstanding:
Basic 320,439 319,360 320,332 319,299
Diluted 321,226 319,578 321,186 319,435
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
------------------------------------------------
(In thousands)
July 1, 2017 Dec. 31, 2016
------------ -------------
ASSETS
Current assets:
Cash and cash equivalents $1,511,353 $2,045,961
Short-term investments 50,000 150,000
Accounts receivable, net 2,081,150 1,631,676
Inventories, net 3,326,563 2,479,958
Other current assets 213,626 198,798
-------------------
Total current assets 7,182,692 6,506,393
Property, plant and equipment, net 5,062,423 5,078,650
Goodwill 2,179,641 2,052,728
Other intangible assets, net 946,978 866,835
Other assets 740,991 718,912
------- -------
Total assets $16,112,725 $15,223,518
=========== ===========
LIABILITIES
Current liabilities:
Short-term debt $39,197 $17,959
Long-term debt due within one year 1,100,000 600,000
Accounts payable 1,214,313 838,109
Salaries, wages and related accruals 422,744 428,829
Accrued expenses and other current
liabilities 549,052 505,069
-------------------
Total current liabilities 3,325,306 2,389,966
Long-term debt due after one year 3,240,694 3,739,141
Deferred credits and other liabilities 834,812 839,703
------- -------
Total liabilities 7,400,812 6,968,810
--------- ---------
EQUITY
Nucor stockholders' equity:
Common stock 151,920 151,734
Additional paid-in capital 2,004,079 1,974,672
Retained earnings 8,067,846 7,630,916
Accumulated other comprehensive loss,
net of income taxes (292,935) (317,843)
Treasury stock (1,553,845) (1,559,614)
--------------
Total Nucor stockholders'
equity 8,377,065 7,879,865
Noncontrolling interests 334,848 374,843
------- -------
Total equity 8,711,913 8,254,708
--------- ---------
Total liabilities and equity $16,112,725 $15,223,518
=========== ===========
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
----------------------------------------------------------
(In thousands)
Six Months (26 Weeks) Ended
---------------------------
July 1, 2017 July 2, 2016
------------ ------------
Operating activities:
Net earnings $719,372 $393,866
Adjustments:
Depreciation 318,278 306,088
Amortization 45,443 35,587
Stock-based compensation 41,159 37,576
Deferred income taxes (4,173) 11,687
Distributions from affiliates 46,877 37,026
Equity in earnings of unconsolidated affiliates (22,058) (16,064)
Changes in assets and liabilities (exclusive of acquisitions and
dispositions):
Accounts receivable (396,452) (398,266)
Inventories (781,581) (183,056)
Accounts payable 371,158 452,815
Federal income taxes (14,114) 129,325
Salaries, wages and related accruals (5,794) 32,091
Other operating activities 28,849 27,697
------ ------
Cash provided by operating activities 346,964 866,372
------- -------
Investing activities:
Capital expenditures (189,235) (227,342)
Investment in and advances to affiliates (19,000) (12,508)
Disposition of plant and equipment 12,509 11,631
Acquisitions (net of cash acquired) (478,410) -
Purchases of investments (50,000) (550,000)
Proceeds from the sale of investments 150,000 100,000
Other investing activities (990) 6,265
Cash used in investing activities (575,126) (671,954)
-------- --------
Financing activities:
Net change in short-term debt 21,235 (31,375)
Issuance of common stock 7,432 1,882
Payment of tax withholdings on certain stock-based compensation (13,185) (9,407)
Excess tax benefits from stock-based compensation - 916
Distributions to noncontrolling interests (79,420) (78,684)
Cash dividends (242,704) (240,302)
Acquisition of treasury stock - (5,173)
Other financing activities (1,101) (4,630)
Cash used in financing activities (307,743) (366,773)
-------- --------
Effect of exchange rate changes on cash 1,297 14,036
----- ------
Decrease in cash and cash equivalents (534,608) (158,319)
Cash and cash equivalents - beginning of year 2,045,961 1,939,469
--------- ---------
Cash and cash equivalents - end of six months $1,511,353 $1,781,150
========== ==========
Non-cash investing activity:
Change in accrued plant and equipment purchases $(12,927) $2,630
=========
View original content:http://www.prnewswire.com/news-releases/nucor-reports-results-for-second-quarter-and-first-half-of-2017-300491471.html
SOURCE Nucor Corporation
