CHARLOTTE, N.C., Oct. 20, 2016 /PRNewswire/ -- Nucor
Corporation (NYSE: NUE) announced today consolidated net earnings
of $270.0 million, or $0.84 per diluted share, for the third quarter of
2016. By comparison, Nucor reported net earnings of $233.8 million, or $0.73 per diluted share, for the second quarter
of 2016 and net earnings of $227.1
million, or $0.71 per diluted
share, for the third quarter of 2015.
In the first nine months of 2016, Nucor reported consolidated
net earnings of $547.6 million, or
$1.79 per diluted share, compared
with consolidated net earnings of $419.7
million, or $1.30 per diluted
share, in the first nine months of last year.
Earnings (loss) before income taxes and noncontrolling interests
by segment were as follows for the third quarter and first nine
months of 2016 and 2015 (in thousands):
|
|
Three Months (13
Weeks) Ended
|
|
Nine Months (39
Weeks) Ended
|
|
|
October
1, 2016
|
|
October
3, 2015
|
|
October
1, 2016
|
|
October
3, 2015
|
Steel
mills
|
|
$
593,149
|
|
$
260,776
|
|
$
1,403,711
|
|
$
676,404
|
Steel
products
|
|
72,578
|
|
96,167
|
|
197,891
|
|
199,261
|
Raw
materials
|
|
14,313
|
|
(43,177)
|
|
(76,240)
|
|
(122,778)
|
Corporate/eliminations
|
(253,768)
|
|
40,505
|
|
(586,680)
|
|
(63,349)
|
|
|
$
426,272
|
|
$
354,271
|
|
$
938,682
|
|
$
689,538
|
|
|
|
|
|
|
|
|
|
Nucor's results include a charge of $59.3
million ($0.12 per diluted
share) to value inventories using the last-in, first-out (LIFO)
method of accounting. The charge is compared with a charge of
$19.0 million ($0.03 per diluted share) in the second quarter of
2016 and a credit of $137.0 million
($0.27 per diluted share) in the
third quarter of 2015. As a result, the LIFO charge in the first
nine months of 2016 was $105.8
million ($0.20 per diluted s
hare), compared with a LIFO credit of $249.0
million ($0.48 per diluted
share) in the first nine months of 2015. Included in the third
quarter of 2016 results were charges related to legal settlements
of $33.7 million ($0.06 per diluted share) and a net benefit of
$11.1 million ($0.02 per diluted share) related to fair value
adjustments to assets in the corporate/eliminations
segment. Included in the third quarter of 2015 earnings are
out-of-period non-cash gains totaling $10.2
million ($0.03 per diluted
share) related to a correction of deferred tax balances.
Nucor's consolidated net sales increased 1% to $4.29 billion in the third quarter of 2016 from
$4.25 billion in the second quarter
of 2016 and increased 2% compared with $4.23
billion in the third quarter of 2015. Average sales price
per ton in the third quarter of 2016 increased 11% from the second
quarter of 2016 and increased 2% from the third quarter of 2015.
Total tons shipped to outside customers were 5,889,000 tons in the
third quarter of 2016, a 9% decrease from the second quarter of
2016 and flat with the third quarter of 2015. Total third quarter
steel mill shipments decreased 12% from the second quarter of 2016
and increased 1% from the third quarter of 2015. Third quarter
downstream steel products shipments to outside customers increased
8% from the second quarter of 2016 and decreased 3% from the third
quarter of 2015.
In the first nine months of 2016, Nucor's consolidated net sales
decreased 6% to $12.25 billion,
compared with $12.98 billion in last
year's first nine months. Total tons shipped to outside customers
increased 5% from the first nine months of 2015, while average
sales price per ton decreased 10%.
The average scrap and scrap substitute cost per ton used during
the third quarter of 2016 was $252,
an increase of 9% from $232 in the
second quarter of 2016 and a decrease of 4% compared to
$262 in the third quarter of 2015.
The average scrap and scrap substitute cost per ton used in the
first nine months of 2016 was $225, a
decrease of 21% from $285 in the
first nine months of 2015.
Overall operating rates at our steel mills decreased to 71% in
the third quarter of 2016 as compared to 83% in the second quarter
of 2016 and increased from 69% in the third quarter of 2015. Steel
mill operating rates for the first nine months of 2016 increased to
76% as compared to 69% for the first nine months of 2015.
Total steel mill energy costs in the third quarter of 2016
increased approximately $4 per ton
compared to the second quarter of 2016 due to higher natural gas
unit costs and decreased productivity resulting from lower steel
production volumes. Total steel mill energy costs in the third
quarter of 2016 decreased approximately $3 per ton compared to the third quarter of 2015
due to lower electricity and natural gas unit costs. Energy costs
for the first nine months of 2016 decreased $5 per ton from the first nine months of 2015 due
to improved productivity from increased production volumes and
lower unit costs for electricity and natural gas.
Our liquidity position remains strong with $2.35
billion in cash and cash equivalents and short-term
investments and an undrawn $1.5
billion line of credit that does not expire until
April 2021.
In September, Nucor's board of directors declared a cash
dividend of $0.375 per share payable
on November 10, 2016 to stockholders
of record on September 30, 2016. This
dividend is Nucor's 174th consecutive quarterly cash dividend, a
record we expect to continue.
Nucor announced in September that it has agreed to acquire
Independence Tube Corporation (ITC), a leading manufacturer of
hollow structural section steel tubing, for $435 million, or approximately 6x average EBITDA
over the 2013-2015 period. ITC operates four strategically located
state-of-the-art facilities in Illinois and Alabama that produce roughly 600,000 tons
annually and employ approximately 335 teammates. The acquisition is
another important step in Nucor's long-term strategy to increase
the number of value-added products offered to customers and
provides another growth platform to the Nucor portfolio.
Also in September, Nucor announced the addition of the Specialty
Cold Mill Complex at its Nucor Steel Arkansas division. The
Specialty Cold Mill Complex will expand Nucor's capability to
produce advanced high-strength, motor lamination, and high-strength
low-alloy steel products. The new mill and expanded annealing
capacity will cost an estimated $230
million to build and is expected to be in operation in
approximately two years. The addition will give Nucor the
capability to produce products the company currently does not make,
adding to Nucor's comprehensive product portfolio and further
differentiating Nucor from its competitors as the leader in
providing solutions to its customers.
At the beginning of October, Nucor concluded several
transactions to improve its access to a long-term supply of natural
gas. Nucor purchased 49% of Encana's leasehold interest covering
approximately 54,000 acres in the South Piceance Basin, terminated
two Carry and Earning drilling agreements, and sold its 50% equity
interest in Hunter Ridge Energy Services LLC to Encana. Nucor also
entered into long-term agreements directly with existing third
party gathering and processing service providers to support its
operating and potential future well developments in the South
Piceance Basin. These transactions provide Nucor with capital
flexibility and preserve long-term access to low cost gas resources
in support of its raw material strategy.
The flat-rolled trade cases are having a positive impact as
steel imports are down approximately 20% this year compared to last
year. Over the summer, affirmative final determinations were
announced in the three flat-rolled antidumping duty and
countervailing duty cases involving corrosion-resistant,
cold-rolled and hot-rolled steel products. These final
determinations are an important step in returning fair trade to the
U.S. flat-rolled steel market. Last month, the Department of
Commerce released its preliminary determinations in the
cut-to-length plate investigations involving China and Korea and we expect preliminary
determinations in the remaining cases to be announced soon. We
expect the plate cases to conclude by mid-2017. We also filed new
trade cases in September addressing rebar imports from Turkey, Taiwan and Japan.
The improvement in earnings in the third quarter of 2016
compared to the second quarter of 2016 is primarily due to the
performance of our steel mills segment and raw materials segment.
The profitability of our sheet mills improved due to higher average
selling prices, which benefited in part from contract sales that
are priced on a lagging quarterly basis. Demand for cold-rolled and
galvanized sheet products remained robust, while demand for
hot-rolled sheet products has weakened since the first half of the
year. Market conditions for our plate and bar mills continue to be
challenging due to high levels of imports. Energy, heavy equipment
and agricultural markets remain weak. The automotive markets remain
strong.
The performance of the raw materials segment in the third
quarter of 2016 significantly improved compared to the second
quarter of 2016 due to the improved performance of our DRI
facilities, which were profitable for the quarter. We experienced
decreased profitability for our steel products segment in the third
quarter of 2016 as compared to the second quarter of 2016 due to
margin compression resulting from higher steel prices. We continue
to see gradual improvement in nonresidential construction
markets.
Earnings in the fourth quarter of 2016 are expected to decrease
notably compared to the third quarter of 2016 primarily due to
lower margins in the steel mills segment, with the most significant
impact being on the sheet mills. We expect the raw materials
segment to return to a loss position due to the impact of lower
transfer prices at our DRI facilities in the fourth quarter. The
performance of our steel products segment is expected to decrease
due to end of year seasonality that is typical in the fourth
quarter.
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; 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 2015 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 20, 2016
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 1,
2016
|
|
October 3,
2015
|
|
Percentage
Change
|
|
October 1,
2016
|
|
October 3,
2015
|
|
Percentage
Change
|
Steel mills
production
|
|
5,012
|
|
4,942
|
|
1%
|
|
16,292
|
|
14,896
|
|
9%
|
Steel mills total
shipments
|
|
5,213
|
|
5,166
|
|
1%
|
|
16,790
|
|
15,401
|
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales tons to
outside customers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel
mills
|
|
4,465
|
|
4,440
|
|
1%
|
|
14,446
|
|
13,183
|
|
10%
|
|
Joist
|
|
129
|
|
124
|
|
4%
|
|
322
|
|
310
|
|
4%
|
|
Deck
|
|
123
|
|
117
|
|
5%
|
|
332
|
|
291
|
|
14%
|
|
Cold
finished
|
|
99
|
|
107
|
|
-7%
|
|
328
|
|
354
|
|
-7%
|
|
Fabricated
concrete
|
|
|
|
|
|
|
|
|
|
|
|
|
|
reinforcing
steel
|
|
311
|
|
339
|
|
-8%
|
|
857
|
|
925
|
|
-7%
|
|
Other
|
|
762
|
|
756
|
|
1%
|
|
2,209
|
|
2,510
|
|
-12%
|
|
|
|
5,889
|
|
5,883
|
|
-
|
|
18,494
|
|
17,573
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
Three
Months (13 Weeks) Ended
|
|
Nine Months (39
Weeks) Ended
|
|
|
|
|
|
|
|
|
|
October 1,
2016
|
|
October 3,
2015
|
|
October 1,
2016
|
|
October 3,
2015
|
|
|
|
|
|
|
|
|
Net
sales
|
$
4,290,236
|
|
$
4,225,514
|
|
$
12,251,584
|
|
$
12,982,563
|
|
|
|
|
|
|
|
|
Costs, expenses
and other:
|
|
|
|
|
|
|
|
Cost of
products sold
|
3,665,900
|
|
3,701,678
|
|
10,774,040
|
|
11,784,139
|
Marketing,
administrative and other expenses
|
169,223
|
|
124,339
|
|
440,679
|
|
377,492
|
Equity in
earnings of
|
|
|
|
|
|
|
|
unconsolidated
affiliates
|
(14,168)
|
|
(115)
|
|
(30,232)
|
|
(550)
|
Interest
expense, net
|
43,009
|
|
45,341
|
|
128,415
|
|
131,944
|
|
3,863,964
|
|
3,871,243
|
|
11,312,902
|
|
12,293,025
|
Earnings before
income taxes and
|
|
|
|
|
|
|
|
noncontrolling
interests
|
426,272
|
|
354,271
|
|
938,682
|
|
689,538
|
Provision for
income taxes
|
131,788
|
|
86,535
|
|
281,401
|
|
178,166
|
Net
earnings
|
294,484
|
|
267,736
|
|
657,281
|
|
511,372
|
Earnings
attributable to
|
|
|
|
|
|
|
|
noncontrolling
interests
|
24,448
|
|
40,610
|
|
82,719
|
|
91,691
|
Net earnings
attributable to
|
|
|
|
|
|
|
|
Nucor
stockholders
|
$
270,036
|
|
$
227,126
|
|
$
574,562
|
|
$
419,681
|
|
|
|
|
|
|
|
|
Net earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$0.84
|
|
$0.71
|
|
$1.79
|
|
$1.30
|
Diluted
|
$0.84
|
|
$0.71
|
|
$1.79
|
|
$1.30
|
|
|
|
|
|
|
|
|
Average shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
319,737
|
|
320,819
|
|
319,444
|
|
320,544
|
Diluted
|
320,028
|
|
320,900
|
|
319,632
|
|
320,695
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 1,
2016
|
|
Dec. 31,
2015
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
1,704,707
|
|
$
1,939,469
|
|
Short-term
investments
|
|
650,000
|
|
100,000
|
|
Accounts
receivable, net
|
|
1,850,455
|
|
1,383,823
|
|
Inventories,
net
|
|
2,338,432
|
|
2,145,444
|
|
Other
current assets
|
|
156,828
|
|
185,644
|
|
|
|
|
|
|
|
|
|
|
Total
current assets
|
|
6,700,422
|
|
5,754,380
|
|
|
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
4,913,355
|
|
4,891,153
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
2,026,841
|
|
2,011,278
|
|
|
|
|
|
|
|
|
Other
intangible assets, net
|
|
757,627
|
|
770,672
|
|
|
|
|
|
|
|
|
Other
assets
|
|
715,434
|
|
799,461
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
15,113,679
|
|
$
14,226,944
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Short-term
debt
|
|
$
29,795
|
|
$
51,315
|
|
Accounts
payable
|
|
926,118
|
|
566,527
|
|
Salaries,
wages and related accruals
|
|
389,585
|
|
289,004
|
|
Accrued
expenses and other current liabilities
|
|
552,989
|
|
478,327
|
|
|
|
|
|
|
|
|
|
|
Total
current liabilities
|
|
1,898,487
|
|
1,385,173
|
|
|
|
|
|
|
|
|
Long-term
debt due after one year
|
|
4,338,347
|
|
4,337,145
|
|
|
|
|
|
|
|
|
Deferred
credits and other liabilities
|
|
786,329
|
|
718,613
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
7,023,163
|
|
6,440,931
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
Nucor
stockholders' equity:
|
|
|
|
|
|
Common
stock
|
|
151,637
|
|
151,426
|
|
Additional
paid-in capital
|
|
1,954,451
|
|
1,918,970
|
|
Retained
earnings
|
|
7,469,580
|
|
7,255,972
|
|
Accumulated
other comprehensive loss,
|
|
|
|
|
|
|
net of
income taxes
|
|
(288,584)
|
|
(351,362)
|
|
Treasury
stock
|
|
(1,559,838)
|
|
(1,558,128)
|
|
|
Total Nucor
stockholders' equity
|
|
7,727,246
|
|
7,416,878
|
|
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
363,270
|
|
369,135
|
|
|
|
|
|
|
|
|
|
|
Total
equity
|
|
8,090,516
|
|
7,786,013
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and equity
|
|
$
15,113,679
|
|
$
14,226,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months (39
Weeks) Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 1,
2016
|
|
October 3,
2015
|
|
|
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
|
Net
earnings
|
|
|
$
657,281
|
|
$
511,372
|
|
Adjustments:
|
|
|
|
|
|
|
|
Depreciation
|
|
|
459,109
|
|
469,239
|
|
|
Amortization
|
|
|
54,066
|
|
55,673
|
|
|
Stock-based
compensation
|
|
44,210
|
|
39,542
|
|
|
Deferred income
taxes
|
|
49,834
|
|
(52,661)
|
|
|
Distributions from
affiliates
|
|
38,474
|
|
14,149
|
|
|
Equity in earnings
of unconsolidated affiliates
|
(30,232)
|
|
(550)
|
|
|
Changes in assets
and liabilities (exclusive of acquisitions and
dispositions):
|
|
|
|
|
|
|
Accounts
receivable
|
|
(328,000)
|
|
328,671
|
|
|
|
Inventories
|
|
(184,320)
|
|
370,445
|
|
|
|
Accounts
payable
|
|
216,218
|
|
(83,396)
|
|
|
|
Federal income
taxes
|
|
28,915
|
|
113,458
|
|
|
|
Salaries, wages
and related accruals
|
103,324
|
|
(15,993)
|
|
|
|
Other operating
activities
|
62,801
|
|
7,350
|
|
|
|
|
|
|
|
|
|
Cash provided by
operating activities
|
|
1,171,680
|
|
1,757,299
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
Capital
expenditures
|
|
(327,436)
|
|
(283,087)
|
|
Investment in and
advances to affiliates
|
(48,167)
|
|
(41,271)
|
|
Disposition of
plant and equipment
|
14,883
|
|
24,996
|
|
Acquisitions (net
of cash acquired)
|
(48,105)
|
|
(253)
|
|
Purchases of
investments
|
|
(650,000)
|
|
(111,927)
|
|
Proceeds from the
sale of investments
|
100,000
|
|
111,452
|
|
Other investing
activities
|
|
13,350
|
|
2,947
|
|
|
|
|
|
|
|
|
|
Cash used in
investing activities
|
|
(945,475)
|
|
(297,143)
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
Net change in
short-term debt
|
|
(21,520)
|
|
(152,529)
|
|
Repayment of
long-term debt
|
|
-
|
|
(16,300)
|
|
Issuance of common
stock
|
|
5,727
|
|
423
|
|
Excess tax
benefits from stock-based compensation
|
1,507
|
|
1,700
|
|
Distributions to
noncontrolling interests
|
(86,808)
|
|
(56,085)
|
|
Cash
dividends
|
|
|
(360,675)
|
|
(359,461)
|
|
Acquisition of
treasury stock
|
|
(5,173)
|
|
-
|
|
Other financing
activities
|
|
(5,212)
|
|
(1,630)
|
|
|
|
|
|
|
|
|
|
Cash used in
financing activities
|
|
(472,154)
|
|
(583,882)
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
11,187
|
|
(4,993)
|
|
|
|
|
|
|
|
|
|
(Decrease)
increase in cash and cash equivalents
|
(234,762)
|
|
871,281
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents - beginning of year
|
1,939,469
|
|
1,024,144
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents - end of nine months
|
$
1,704,707
|
|
$
1,895,425
|
|
|
|
|
|
|
|
|
|
Non-cash investing
activity:
|
|
|
|
|
|
Change in accrued
plant and equipment purchases
|
$
140,347
|
|
$
(14,577)
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/nucor-reports-results-for-third-quarter-and-nine-months-of-2016-300348365.html
SOURCE Nucor Corporation