Nucor Reports Results for First Quarter of 2018

Nucor Reports Results for First Quarter of 2018

PR Newswire

CHARLOTTE, N.C., April 19, 2018 /PRNewswire/ -- Nucor Corporation NUE announced today consolidated net earnings of $354.2 million, or $1.10 per diluted share, for the first quarter of 2018. By comparison, Nucor reported consolidated net earnings of $383.9 million, or $1.20 per diluted share, for the fourth quarter of 2017 and $356.9 million, or $1.11 per diluted share, for the first quarter of 2017.

"Nucor's disciplined strategy for profitable growth is working," said John Ferriola, Nucor's Chairman, Chief Executive Officer and President. "Our 2017 earnings were Nucor's highest annual earnings since the cyclical peak year of 2008. The positive momentum has clearly carried over into 2018, as evidenced by our strong first quarter earnings and a bullish second quarter outlook."

Selected Segment Data

In the first quarter of 2018, the Company began reporting its tubular products and piling businesses as part of the steel products segment.  These businesses were previously included in the steel mills segment. All prior period segment data presented in this release has been recast to reflect this change. Earnings (loss) before income taxes and noncontrolling interests by segment were as follows for the first quarters of 2018 and 2017 (in thousands):





Three Months (13 Weeks) Ended





March 31, 2018



April 1, 2017











Steel mills



$           560,503



$             644,183

Steel products



85,814



66,919

Raw materials



74,547



26,391

Corporate/eliminations



(204,952)



(188,518)





$           515,912



$             548,975











Financial Review

Included in the first quarter of 2018 results was an expense of $21.8 million, or $0.07 per diluted share, related to the write off of deferred tax assets due to the change in the tax status of a subsidiary. Included in the fourth quarter of 2017 results was a net benefit of $175.2 million, or $0.55 per diluted share, related to the impacts of U.S. federal tax legislation enacted in the fourth quarter of 2017. Included in the first quarter of 2017 results were 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 9% to $5.57 billion in the first quarter of 2018 compared with $5.09 billion in the fourth quarter of 2017 and increased 16% compared with $4.82 billion in the first quarter of 2017. Average sales price per ton in the first quarter of 2018 increased 3% compared with the fourth quarter of 2017 and increased 9% compared with the first quarter of 2017. Total tons shipped to outside customers were 6,967,000 tons in the first quarter of 2018, a 6% increase from both the fourth quarter of 2017 and the first quarter of 2017. Total steel mill shipments in the first quarter of 2018 increased 8% from the fourth quarter of 2017 and increased 7% from the first quarter of 2017. Downstream steel products shipments to outside customers in the first quarter of 2018 increased 1% from the fourth quarter of 2017 and increased 15% from the first quarter of 2017.

The average scrap and scrap substitute cost per ton used during the first quarter of 2018 was $337, a 6% increase compared to $317 in the fourth quarter of 2017 and an increase of 19% compared to $284 in the first quarter of 2017.

Overall operating rates at our steel mills increased to 92% in the first quarter of 2018 as compared to 82% in the fourth quarter of 2017 and 88% in the first quarter of 2017.

Total steel mill energy costs in the first quarter of 2018 increased approximately $1 per ton compared to both the fourth quarter of 2017 and first quarter of 2017 due to higher electricity unit costs.

Our liquidity position remains strong with $760.0 million in cash and cash equivalents as of March 31, 2018. Subsequent to the end of the first quarter, we amended and extended our untapped $1.5 billion revolving credit facility to mature in April 2023.

Recent Developments

In February 2018, Nucor's board of directors declared a cash dividend of $0.38 per share payable on May 11, 2018 to stockholders of record on March 29, 2018. This dividend is Nucor's 180th consecutive quarterly cash dividend, a record we expect to continue.

In March 2018, Nucor announced plans to build a rebar micro mill in Frostproof, Florida, which is located in Polk County. The micro mill is a $240 million investment that will have an estimated annual capacity of 350,000 tons and employ approximately 250 people. We anticipate the project will take approximately two years to complete. This location will provide a logistical advantage to Nucor and allow us to capitalize on a currently abundant supply of scrap, a good portion of which is handled by our scrap business, The David J. Joseph Company. This is the second rebar micro mill Nucor is constructing.  

First Quarter of 2018 Analysis

As expected, earnings in the steel mills segment in the first quarter of 2018 improved compared to the fourth quarter of 2017 due to higher selling prices and increased volumes for all of our steel mill products. The profitability of the steel products segment in the first quarter of 2018 decreased compared to the fourth quarter of 2017 due to typical seasonality. The performance of the raw materials segment improved from the fourth quarter of 2017 due to the much improved performance of our scrap processing operations as well as our direct reduced iron (DRI) facilities.

Second Quarter of 2018 Outlook

Earnings in the second quarter of 2018 are expected to increase significantly compared to the first quarter of 2018. It is worth noting that steel mill metal margins and profits in March were by far the strongest in the first quarter of 2018. The performance of the steel mills segment is expected to improve in the second quarter of 2018 as compared to the first quarter of 2018 as we continue to experience the benefit of announced price increases. We believe there is sustainable strength in steel end use markets, and we are encouraged by recent actions by the government to address the massive flood of dumped and illegally subsidized imports into the United States. We believe broad-based tariffs with few exceptions are needed to address the historic volume of unfairly traded imports and transshipping that is done to avoid trade duties. We expect improved performance for our steel products segment in the second quarter of 2018 as compared to the first quarter of 2018 as rising steel input costs are being passed on to customers.

About Nucor

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.

Forward-Looking Statements

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) 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 the 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 fiscal 2017 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 April 19, 2018 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







March 31, 2018



April 1, 2017



Percentage

Change

Steel mills total shipments















Sheet



2,698



2,705



-



Bars



2,242



1,957



15%



Structural



601



572



5%



Plate



596



577



3%



Other



131



74



77%







6,268



5,885



7%

















Sales tons to outside customers:















Steel mills



5,016



4,860



3%



Joist



105



101



4%



Deck



106



106



-



Cold finished



147



122



20%



Fabricated concrete















reinforcing steel



290



247



17%



Piling



126



119



6%



Tubular products



284



223



27%



Other



893



806



11%







6,967



6,584



6%

 

 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)











  Three Months (13 Weeks) Ended 











March 31, 2018



April 1, 2017









Net sales

$      5,568,419



$         4,815,179









Costs, expenses and other:







  Cost of products sold

4,842,013



4,054,929

  Marketing, administrative and other expenses

182,960



176,426

  Equity in earnings of unconsolidated affiliates

(9,580)



(8,756)

  Interest expense, net

37,114



43,605



5,052,507



4,266,204

Earnings before income taxes and







noncontrolling interests

515,912



548,975

Provision for income taxes

135,800



171,327

Net earnings

380,112



377,648

Earnings attributable to







noncontrolling interests

25,933



20,749

Net earnings attributable to







Nucor stockholders

$          354,179



$            356,899









Net earnings per share:







  Basic

$1.11



$1.11

  Diluted

$1.10



$1.11









Average shares outstanding:







  Basic

319,421



320,224

  Diluted

320,474



321,146









 

 

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

 (In thousands)



























March 31, 2018



Dec. 31, 2017

 ASSETS











 Current assets:











 Cash and cash equivalents



$          760,254



$        949,104



 Short-term investments



-



50,000



 Accounts receivable, net



2,371,758



2,028,545



 Inventories, net



3,708,503



3,461,686



 Other current assets



238,701



335,085





















 Total current assets



7,079,216



6,824,420

















 Property, plant and equipment, net



5,090,890



5,093,147

















 Goodwill





2,195,565



2,196,058

















 Other intangible assets, net



892,121



914,646

















 Other assets



863,454



812,987





















 Total assets



$    16,121,246



$   15,841,258

















 LIABILITIES











 Current liabilities:











 Short-term debt



$            74,036



$           52,833



 Long-term debt due within one year



500,000



500,000



 Accounts payable



1,329,902



1,181,346



 Salaries, wages and related accruals



338,045



516,660



 Accrued expenses and other current liabilities



602,598



573,925





















 Total current liabilities



2,844,581



2,824,764

















 Long-term debt due after one year



3,242,865



3,242,242

















 Deferred credits and other liabilities



710,881



689,464





















 Total liabilities



6,798,327



6,756,470

















 EQUITY











 Nucor stockholders' equity:











 Common stock



152,061



151,960



 Additional paid-in capital



2,041,297



2,021,339



 Retained earnings



8,696,007



8,463,709



 Accumulated other comprehensive loss,













 net of income taxes



(249,366)



(254,681)



 Treasury stock



(1,663,972)



(1,643,291)





 Total Nucor stockholders' equity



8,976,027



8,739,036

















 Noncontrolling interests



346,892



345,752





















 Total equity



9,322,919



9,084,788





















 Total liabilities and equity



$    16,121,246



$   15,841,258

















 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

 (In thousands)































Three Months (13 Weeks) Ended































March 31, 2018



April 1, 2017



















Operating activities:













Net earnings





$        380,112



$        377,648



Adjustments:















Depreciation





158,665



158,525





Amortization





22,453



22,368





Stock-based compensation



10,463



9,524





Deferred income taxes



29,988



(6,695)





Distributions from affiliates



25,150



30,249





Equity in earnings of unconsolidated affiliates

(9,580)



(8,756)





Changes in assets and liabilities (exclusive of acquisitions and dispositions):













Accounts receivable



(343,982)



(290,261)







Inventories





(246,933)



(519,902)







Accounts payable



214,399



413,256







Federal income taxes



86,746



157,346







Salaries, wages and related accruals

(171,626)



(102,744)







Other operating activities



28,629



3,584



















Cash provided by operating activities



184,484



244,142



















Investing activities:













Capital expenditures





(228,766)



(94,535)



Investment in and advances to affiliates

(55,901)



(14,000)



Disposition of plant and equipment



5,967



8,870



Acquisitions (net of cash acquired)



-



(485,060)



Purchases of investments



-



(50,000)



Proceeds from the sale of investments



50,000



150,000



Other investing activities



975



-



















Cash used in investing activities



(227,725)



(484,725)



















Financing activities:













Net change in short-term debt



21,203



30,180



Issuance of common stock



15,312



7,432



Payment of tax withholdings on certain stock-based compensation

(4,430)



(1,349)



Distributions to noncontrolling interests

(24,793)



(61,544)



Cash dividends





(121,787)



(121,303)



Acquisition of treasury stock



(29,193)



-



Other financing activities



(1,844)



(518)



















Cash used in financing activities



(145,532)



(147,102)



















Effect of exchange rate changes on cash



(77)



(517)



















(Decrease) increase in cash and cash equivalents

(188,850)



(388,202)



















Cash and cash equivalents - beginning of year

949,104



2,045,961



















Cash and cash equivalents - end of three months

$        760,254



$    1,657,759



















Non-cash investing activity:













Change in accrued plant and equipment purchases and assets recorded









under capital lease arrangements



$         (65,959)



$         (11,222)



















 



Cision View original content:http://www.prnewswire.com/news-releases/nucor-reports-results-for-first-quarter-of-2018-300632905.html

SOURCE Nucor Corporation

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