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 October 22, 2015 - 9:00 AM EDT
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Nucor Reports Results for Third Quarter and Nine Months of 2015

CHARLOTTE, N.C., Oct. 22, 2015 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $227.1 million, or $0.71 per diluted share, for the third quarter of 2015. By comparison, Nucor reported net earnings of $124.8 million, or $0.39 per diluted share, in the second quarter of 2015 and net earnings of $245.4 million, or $0.76 per diluted share, in the third quarter of 2014. Third quarter of 2015 diluted net earnings per share of $0.71 was above our guidance range of $0.45 to $0.50 per diluted share due to a larger than forecasted LIFO credit and better than forecasted performance in the steel mills segment.

In the first nine months of 2015, Nucor reported consolidated net earnings of $419.7 million, or $1.30 per diluted share, compared with consolidated net earnings of $503.5 million, or $1.57 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 2015 and 2014 (in thousands):

 




Three Months (13 Weeks)

Ended


Nine Months (39 Weeks)

Ended




October 3, 2015


October 4, 2014


October 3, 2015


October 4, 2014

Earnings (loss) before income









taxes and noncontrolling interests:










Steel mills


$             260,776


$         502,703


$         676,404


$       1,188,638


Steel products


96,167


63,890


199,261


108,222


Raw materials


(43,177)


(19,321)


(122,778)


(20,597)


Corporate/eliminations


40,505


(143,287)


(63,349)


(422,912)




$             354,271


$         403,985


$         689,538


$         853,351











 

Nucor's results include a $137.0 million credit ($0.27 per diluted share) to value inventories using the last-in, first-out (LIFO) method of accounting in the third quarter of 2015, compared with a credit of $95.5 million ($0.19 per diluted share) recorded in the second quarter of 2015 and a credit of $14.5 million ($0.03 per diluted share) in the third quarter of 2014. As a result, the LIFO credit in the first nine months of 2015 was $249.0 million ($0.48 per diluted share), compared with no charge or credit in the first nine months of 2014. The third quarter of 2015 results were impacted by an out-of-period non-cash gain of $10.2 million ($0.03 per diluted share) related to a correction of deferred tax balances. Included in the second quarter of 2015 results was a $9.3 million ($0.03 per diluted share) benefit related to state tax credits. Earnings in the third quarter of 2014 included a $12.5 million charge ($0.03 per diluted share) related to the partial write down of assets within the steel mills segment.

Nucor's consolidated net sales decreased 3% to $4.23 billion in the third quarter of 2015 compared with $4.36 billion in the second quarter of 2015 and decreased 26% compared with $5.70 billion in the third quarter of 2014. Average sales price per ton remained consistent with the second quarter of 2015 and decreased 15% from the third quarter of 2014. Total tons shipped to outside customers were 5,883,000 tons in the third quarter of 2015, a 3% decrease from the second quarter of 2015 and a decrease of 13% from the third quarter of 2014. Total third quarter steel mill shipments decreased 3% from the second quarter of 2015 and decreased 10% from the third quarter of 2014. Third quarter downstream steel products shipments to outside customers increased 9% over the second quarter of 2015 and decreased 3% from the third quarter of 2014.

In the first nine months of 2015, Nucor's consolidated net sales decreased 19% to $12.98 billion, compared with $16.10 billion in last year's first nine months. Total tons shipped to outside customers decreased 9% from the first nine months of 2014, while average sales price per ton decreased 11%.

The average scrap and scrap substitute cost per ton used in the third quarter of 2015 was $262, a 3% decrease from $271 in the second quarter of 2015 and a decrease of 31% from $379 in the third quarter of 2014. The average scrap and scrap substitute cost per ton used in the first nine months of 2015 was $285, a decrease of 26% from $387 in the first nine months of 2014.

Overall operating rates at our steel mills decreased to 69% in the third quarter of 2015 as compared with 73% in the second quarter of 2015 and decreased from 81% in the third quarter of 2014. Steel mill utilization decreased to 69% in the first nine months of 2015 from 78% in the first nine months of 2014.

Total steel mill energy costs in the third quarter of 2015 increased approximately $2 per ton compared with the second quarter of 2015 due to decreased steel production volumes and the resulting reduced efficiencies. Total steel mill energy costs in the third quarter of 2015 decreased approximately $2 per ton compared with the third quarter of 2014 due primarily to lower natural gas unit costs and slightly lower electricity unit costs. Energy costs for the first nine months of 2015 decreased approximately $3 per ton from the first nine months of 2014.

Our liquidity position remains strong with $2.00 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. Cash provided by operating activities in the first nine months of 2015 was robust at $1.76 billion compared to $925.6 million in the first nine months of 2014.

In September, Nucor's board of directors declared a cash dividend of $0.3725 per share payable on November 10, 2015 to stockholders of record on September 30, 2015. This dividend is Nucor's 170th consecutive quarterly cash dividend, a record we expect to continue.

The performance of the steel mills segment in the third quarter of 2015 improved compared to the second quarter of 2015. Margins are improved as our steel mills benefited from a lower average cost of inventory in the third quarter as compared to the second quarter. The automotive market remains strong, while nonresidential construction markets are continuing to gradually improve. Energy, heavy equipment and agricultural markets remain weak. Steel prices and margins remain under pressure from exceptionally high levels of imports that continue to flood the domestic market. Imports accounted for an estimated 30% of the finished steel market in the first nine months of 2015, compared with an estimated 27% in the first nine months of 2014.

The operating performance of the downstream products segment improved in the third quarter of 2015 as compared to the second quarter of 2015 due to increased volumes and lower steel costs. The downstream products segment's profitability in the first nine months of 2015 has significantly improved compared to the first nine months of 2014 primarily due to lower steel costs.

The performance of the raw materials segment decreased from the second quarter of 2015. Nucor Steel Louisiana had an operating loss of approximately $28 million ($0.06 per diluted share) in the third quarter of 2015, which included a $7.7 million ($0.02 per diluted share) net charge related to the write off of the two remaining storage domes at the facility. Nucor Steel Louisiana had an operating loss of approximately $20 million ($0.04 per diluted share) in the second quarter of 2015, which included the benefit of a $10.0 million ($0.02 per diluted share) payment received related to warranty claims associated with the repair of the process gas heater. The performance of the raw materials segment was also impacted by decreased performance in our scrap processing businesses in the third quarter of 2015 as compared to the second quarter of 2015 due to the continued decline in scrap prices. Our direct reduced iron (DRI) facility in Trinidad experienced improved performance in the third quarter of 2015 as compared to the second quarter of 2015, which included a 20-day planned outage.

Earnings in the fourth quarter of 2015 are expected to decrease compared to the third quarter of 2015 due to continued deterioration in global steel markets. A slowing economy in China is causing further global overcapacity and resulting in significant levels of steel imports into the U.S. market. The performance of our downstream products segment is expected to decrease due to end of year seasonality that is typical in the fourth quarter. We expect slightly lower performance in the raw materials segment due to the general impact of lower scrap and metallic commodity prices. We are encouraged by the ongoing strength in the automotive market and the continued gradual improvement in the nonresidential construction market, the largest end market for Nucor products.

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 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) 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 2014 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 22, 2015 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 




Oct. 3, 2015


Oct. 4, 2014


Percentage Change


Oct. 3, 2015


Oct. 4, 2014


Percentage Change

Steel mills production


4,942


5,412


-9%


14,896


15,930


-6%

Steel mills total shipments


5,166


5,741


-10%


15,401


16,650


-8%















Sales tons to outside customers:














Steel mills


4,440


4,851


-8%


13,183


14,097


-6%


Joist


124


128


-3%


310


317


-2%


Deck


117


113


4%


291


301


-3%


Cold finished


107


129


-17%


354


400


-12%


Fabricated concrete














reinforcing steel


339


342


-1%


925


902


3%


Other


756


1,221


-38%


2,510


3,326


-25%




5,883


6,784


-13%


17,573


19,343


-9%















 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)










  Three Months (13 Weeks) Ended  


 Nine Months (39 Weeks) Ended  










Oct. 3, 2015


Oct. 4, 2014


Oct. 3, 2015


Oct. 4, 2014









Net sales

$     4,225,514


$     5,701,869


$      12,982,563


$ 16,101,388









Costs, expenses and other:








  Cost of products sold

3,701,678


5,102,283


11,784,139


14,708,733

  Marketing, administrative and other expenses

124,339


152,604


377,492


418,851

  Equity in earnings of








unconsolidated affiliates

(115)


(2,352)


(550)


(10,028)

  Interest expense, net

45,341


45,349


131,944


130,481


3,871,243


5,297,884


12,293,025


15,248,037

Earnings before income taxes and








noncontrolling interests

354,271


403,985


689,538


853,351

Provision for income taxes

86,535


129,784


178,166


282,519

Net earnings

267,736


274,201


511,372


570,832

Earnings attributable to








noncontrolling interests

40,610


28,754


91,691


67,313

Net earnings attributable to 








Nucor stockholders

$        227,126


$        245,447


$          419,681


$      503,519









Net earnings per share:








  Basic

$0.71


$0.76


$1.30


$1.57

  Diluted

$0.71


$0.76


$1.30


$1.57









Average shares outstanding:








  Basic

320,819


320,023


320,544


319,737

  Diluted

320,900


320,337


320,695


320,025









 

 CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) 

 (In thousands) 














Oct. 3, 2015


Dec. 31, 2014

 ASSETS 






 Current assets: 






 Cash and cash equivalents 


$       1,895,425


$   1,024,144


 Short-term investments 


100,000


100,000


 Accounts receivable, net 


1,716,356


2,068,298


 Inventories, net 


2,361,071


2,745,032


 Other current assets 


392,879


504,414











 Total current assets 


6,465,731


6,441,888









 Property, plant and equipment, net 


5,040,902


5,287,639









 Goodwill 



2,023,788


2,068,664









 Other intangible assets, net 


793,046


862,093









 Other assets 


946,001


955,643











 Total assets 


$     15,269,468


$ 15,615,927









 LIABILITIES 





 Current liabilities: 






 Short-term debt 


$           54,601


$     207,476


 Long-term debt due within one year 


-


16,335


 Accounts payable 


907,332


993,872


 Salaries, wages and related accruals 


329,499


352,488


 Accrued expenses and other current liabilities 


555,979


527,605











 Total current liabilities 


1,847,411


2,097,776









 Long-term debt due after one year 


4,360,600


4,360,600









 Deferred credits and other liabilities 


1,014,116


1,082,433











 Total liabilities 


7,222,127


7,540,809









 EQUITY 






 Nucor stockholders' equity: 






 Common stock 


151,425


151,237


 Additional paid-in capital 


1,913,240


1,883,356


 Retained earnings 


7,438,155


7,378,214


 Accumulated other comprehensive loss, 







 net of income taxes 


(301,911)


(145,708)


 Treasury stock 


(1,491,822)


(1,494,629)



 Total Nucor stockholders' equity 


7,709,087


7,772,470









 Noncontrolling interests 


338,254


302,648











 Total equity 


8,047,341


8,075,118











 Total liabilities and equity 


$     15,269,468


$ 15,615,927









 

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 

 (In thousands) 














Nine Months (39 Weeks) Ended














Oct. 3, 2015


Oct. 4, 2014









Operating activities:






Net earnings 


$               511,372


$               570,832


Adjustments:







Depreciation


469,239


486,684



Amortization


55,673


54,127



Stock-based compensation

39,542


40,325



Deferred income taxes

(52,661)


(43,712)



Distributions from affiliates

14,149


11,504



Equity in earnings of unconsolidated affiliates

(550)


(10,028)



Loss on assets

7,700


21,546



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







Accounts receivable

328,671


(418,353)




Inventories

370,445


(80,975)




Accounts payable

(83,396)


84,161




Federal income taxes

113,458


94,999




Salaries, wages and related accruals

(15,993)


65,027




Other operating activities

(350)


49,426








Cash provided by operating activities

1,757,299


925,563









Investing activities:






Capital expenditures

(283,087)


(557,249)


Investment in and advances to affiliates

(41,271)


(94,128)


Repayment of advances to affiliates

-


26,500


Disposition of plant and equipment

24,996


18,748


Acquisitions (net of cash acquired)

(253)


(38,466)


Purchases of investments

(111,927)


(100,000)


Proceeds from the sale of investments

111,452


27,529


Other investing activities

2,947


-









Cash used in investing activities

(297,143)


(717,066)









Financing activities:






Net change in short-term debt

(152,529)


11,900


Repayment of long-term debt

(16,300)


(3,300)


Issuance of common stock

423


4,465


Excess tax benefits from stock-based compensation

1,700


3,200


Distributions to noncontrolling interests

(56,085)


(51,401)


Cash dividends


(359,461)


(356,230)


Other financing activities

(1,630)


(1,651)









Cash used in financing activities 

(583,882)


(393,017)









Effect of exchange rate changes on cash

(4,993)


(2,787)









Increase (decrease) in cash and cash equivalents

871,281


(187,307)









Cash and cash equivalents - beginning of year

1,024,144


1,483,252









Cash and cash equivalents - end of nine months

$            1,895,425


$            1,295,945









Non-cash investing activity:





Change in accrued plant and equipment purchases

$               (14,577)


$               (98,050)













 

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-2015-300164632.html

SOURCE Nucor Corporation


Source: PR Newswire (October 22, 2015 - 9:00 AM EDT)

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