CHARLOTTE, N.C., July 21, 2016 /PRNewswire/ -- Nucor
Corporation (NYSE: NUE) announced today consolidated net earnings
of $233.8 million, or $0.73 per diluted share, for the second quarter
of 2016. By comparison, Nucor reported net earnings of $70.8 million, or $0.22 per diluted share, for the first quarter of
2016 and net earnings of $124.8
million, or $0.39 per diluted
share, for the second quarter of 2015.
In the first half of 2016, Nucor reported consolidated net
earnings of $304.5 million, or
$0.95 per diluted share, compared
with consolidated net earnings of $192.6
million, or $0.60 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 2016 and 2015 (in thousands):
|
|
Three Months (13
Weeks) Ended
|
|
Six Months (26
Weeks) Ended
|
|
|
July 2,
2016
|
|
July 4,
2015
|
|
July 2,
2016
|
|
July 4,
2015
|
Steel
mills
|
|
$
530,727
|
|
$
198,500
|
|
$
810,562
|
|
$
415,628
|
Steel
products
|
|
82,946
|
|
70,636
|
|
125,313
|
|
103,094
|
Raw
materials
|
|
(27,181)
|
|
(38,104)
|
|
(90,553)
|
|
(79,601)
|
Corporate/eliminations
|
(215,608)
|
|
(14,810)
|
|
(332,912)
|
|
(103,854)
|
|
|
$
370,884
|
|
$
216,222
|
|
$
512,410
|
|
$
335,267
|
|
|
|
|
|
|
|
|
|
Nucor's results include a charge of $19.0
million ($0.03 per diluted
share) to value inventories using the last-in, first-out (LIFO)
method of accounting. The charge is compared with a charge of
$27.5 million ($0.05 per diluted share) in the first quarter of
2016 and a credit of $95.5 million
($0.19 per diluted share) in the
second quarter of 2015. As a result, the LIFO charge in the first
half of 2016 was $46.5 million
($0.09 per diluted share), compared
with a LIFO credit of $112.0 million
($0.22 per diluted share) in the
first half of 2015. Also included in the first quarter of 2016
earnings are out-of-period non-cash gains totaling $13.4
million ($0.04 per diluted
share) related to a noncontrolling interest adjustment and to tax
adjustments. Included in the second quarter of 2015 earnings
were a $9.3 million ($0.03 per diluted share) benefit related to
state tax credits and a $10.0 million ($0.02 per diluted share) benefit related to
warranty claims at Nucor Steel Louisiana.
Nucor's consolidated net sales increased 14% to $4.25 billion in the second quarter of 2016 from
$3.72 billion in the first quarter of
2016 and decreased 3% compared with $4.36
billion in the second quarter of 2015. Average sales price
per ton in the second quarter of 2016 increased 9% from the first
quarter of 2016 and decreased 9% from the second quarter of 2015.
Total tons shipped to outside customers were 6,457,000 tons in the
second quarter of 2016, a 5% increase from the first quarter of
2016 and a 7% increase from the second quarter of 2015. Total
second quarter steel mill shipments increased 5% from the first
quarter of 2016 and increased 11% from the second quarter of 2015.
Second quarter downstream steel products shipments to outside
customers increased 11% from the first quarter of 2016 and
decreased 2% from the second quarter of 2015.
In the first half of 2016, Nucor's consolidated net sales
decreased 9% to $7.96 billion,
compared with $8.76 billion in last
year's first half. Total tons shipped to outside customers
increased 8% from the first half of 2015, while average sales price
per ton decreased 16%.
The average scrap and scrap substitute cost per ton used during
the second quarter of 2016 was $232,
an increase of 20% from $193 in the
first quarter of 2016 and a decrease of 14% compared to
$271 in the second quarter of 2015.
The average scrap and scrap substitute cost per ton used in the
first half of 2016 was $213, a
decrease of 28% from $297 in the
first half of 2015.
Overall operating rates at our steel mills increased to 83% in
the second quarter of 2016 as compared to 74% in the first quarter
of 2016 and 73% in the second quarter of 2015. Operating rates for
the first half of 2016 increased to 79% as compared to 69% for the
first half of 2015.
Total steel mill energy costs in the second quarter of 2016
decreased approximately $1 per ton
compared to the first quarter of 2016 and decreased approximately
$5 per ton compared to the second
quarter of 2015. Energy costs for the first half of 2016 decreased
$7 per ton from the first half of
2015. These decreases were due to lower electricity and natural gas
unit costs and improved productivity resulting from higher steel
production volumes.
Our liquidity position remains strong with $2.33
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 May, Nucor announced that its Vulcraft/Verco
Group is expanding into Canada. The new production
facility will operate as Vulcraft Canada, Inc., and will be
located near Hamilton, Ontario to serve the Central and
Eastern Canadian markets. The facility will produce steel joists,
joist girders and decking. Product fabrication is expected to begin
later this year.
In June, Nucor announced that it is forming a 50-50 joint
venture with JFE Steel Corporation of Japan to build and
operate a plant in central Mexico to supply that
country's automotive market. The plant is expected to have a cost
of $270 million and a capacity of 400,000 tons per year
of galvanized sheet steel. The companies are currently working to
secure required conditions to move to completion, including but not
limited to regulatory approvals. Operations are expected to
begin in the second half of 2019.
Also in June, Nucor's board of directors declared a cash
dividend of $0.375 per share payable
on August 11, 2016 to stockholders of
record on June 30, 2016. This
dividend is Nucor's 173rd consecutive quarterly cash dividend, a
record we expect to continue.
Flat-rolled trade cases are having a positive impact as steel
imports are down in the first five months of this year compared to
the same period last year and preliminary duties are in place and
being collected. Affirmative final determinations in the
antidumping duty and countervailing duty cases of
corrosion-resistant and cold-rolled steel products were recently
announced by the Department of Commerce and the International Trade
Commission. Over the next few months, final determinations
will be announced on the remaining cold-rolled steel cases and on
the hot-rolled steel trade cases. We believe that once all the
facts are known, the government's final determinations will address
all dumping and subsidies associated with these cases. Nucor
and other domestic steel producers also recently filed trade cases
against cut-to-length steel plate imports from 12 countries because
of injury that has occurred from unfairly traded imports in this
market. We believe these cases should provide positive results as
they work their way through the legal process over the next several
months.
The performance of the steel mills segment in the second quarter
of 2016 was much improved compared to the first quarter of 2016 due
to higher average selling prices and improved volumes. The
profitability of our sheet, bar and plate mills for the second
quarter of 2016 increased compared to the first quarter of 2016,
with the largest improvement by the sheet mills. The sheet mills
have benefited from lower inventory levels in the supply chain,
mainly at service centers, and decreased levels of imports. Average
sheet product pricing has increased significantly in the second
quarter of 2016. However, since contract pricing represents
over 50% of our sheet steel shipments, and a portion of our
contract sales are priced on a lagging quarterly basis, we still
have not realized the full benefit of the current improved pricing
environment for sheet steel. We therefore expect a further
improvement in sheet steel pricing and margins in the third quarter
of 2016. Energy, heavy equipment and agricultural markets remain
weak. The automotive markets remain strong.
The performance of our downstream products segment improved from
the first quarter of 2016 due to seasonal factors and the gradual
improvement in nonresidential construction markets. We believe that
the performance of the downstream products segment for the full
year 2016 will be improved compared to 2015, despite higher
expected steel costs and minimal benefits from the 2015 highway
bill, which we believe will have a greater impact on future years'
performance.
The profitability of the raw materials segment in the second
quarter of 2016 improved compared to the first quarter of 2016 due
primarily to the performance of our scrap processing business,
which benefited from increased pricing, improved collaboration with
our steel mills, and efficiency improvements resulting from cost
reduction initiatives. The second quarter of 2016 performance
of our direct reduced iron (DRI) facilities was also improved from
the first quarter of 2016. We expect our DRI facilities will be
profitable in the third quarter of 2016, benefiting from improved
iron units pricing, lower iron ore costs and continued gains in
yield performance.
We expect further strong improvement in earnings in the third
quarter of 2016. Most of the quarter over quarter improvement will
be in the steel mills segment, primarily in our sheet mills. The
performance of the raw materials segment is expected to improve
significantly in the third quarter of 2016 as compared to the
second quarter of 2016 due primarily to improved performance at our
DRI facilities. We expect increased profitability for our
downstream products segment in the third quarter of 2016 as
compared to the second quarter of 2016 due to the gradual
improvement in nonresidential construction markets.
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 second
quarter results on July 21, 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
|
|
Six Months
(26 Weeks) Ended
|
|
|
|
July 2,
2016
|
|
July 4,
2015
|
|
Percentage
Change
|
|
July 2,
2016
|
|
July 4,
2015
|
|
Percentage
Change
|
Steel mills
production
|
|
5,890
|
|
5,196
|
|
13%
|
|
11,280
|
|
9,954
|
|
13%
|
Steel mills total
shipments
|
5,930
|
|
5,348
|
|
11%
|
|
11,577
|
|
10,235
|
|
13%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales tons to
outside customers:
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel
mills
|
|
5,082
|
|
4,578
|
|
11%
|
|
9,981
|
|
8,743
|
|
14%
|
|
Joist
|
|
95
|
|
97
|
|
-2%
|
|
193
|
|
186
|
|
4%
|
|
Deck
|
|
108
|
|
92
|
|
17%
|
|
209
|
|
174
|
|
20%
|
|
Cold
finished
|
|
110
|
|
117
|
|
-6%
|
|
229
|
|
247
|
|
-7%
|
|
Fabricated
concrete
|
|
|
|
|
|
|
|
|
|
|
|
|
reinforcing
steel
|
304
|
|
324
|
|
-6%
|
|
546
|
|
586
|
|
-7%
|
|
Other
|
|
758
|
|
847
|
|
-11%
|
|
1,447
|
|
1,754
|
|
-18%
|
|
|
|
6,457
|
|
6,055
|
|
7%
|
|
12,605
|
|
11,690
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
Three
Months (13 Weeks) Ended
|
|
Six Months
(26 Weeks) Ended
|
|
|
|
|
|
|
|
|
|
July 2,
2016
|
|
July 4,
2015
|
|
July 2,
2016
|
|
July 4,
2015
|
|
|
|
|
|
|
|
|
Net
sales
|
$
4,245,772
|
|
$
4,357,609
|
|
$
7,961,348
|
|
$
8,757,049
|
|
|
|
|
|
|
|
|
Costs, expenses
and other:
|
|
|
|
|
|
|
|
Cost of
products sold
|
3,679,512
|
|
3,971,303
|
|
7,108,140
|
|
8,082,461
|
Marketing,
administrative and other expenses
|
161,711
|
|
128,592
|
|
271,456
|
|
253,153
|
Equity in
earnings of
|
|
|
|
|
|
|
|
unconsolidated
affiliates
|
(6,819)
|
|
(694)
|
|
(16,064)
|
|
(435)
|
Interest
expense, net
|
40,484
|
|
42,186
|
|
85,406
|
|
86,603
|
|
3,874,888
|
|
4,141,387
|
|
7,448,938
|
|
8,421,782
|
Earnings before
income taxes and
|
|
|
|
|
|
|
|
noncontrolling
interests
|
370,884
|
|
216,222
|
|
512,410
|
|
335,267
|
Provision for
income taxes
|
112,548
|
|
56,878
|
|
149,613
|
|
91,631
|
Net
earnings
|
258,336
|
|
159,344
|
|
362,797
|
|
243,636
|
Earnings
attributable to
|
|
|
|
|
|
|
|
noncontrolling
interests
|
24,564
|
|
34,589
|
|
58,271
|
|
51,081
|
Net earnings
attributable to
|
|
|
|
|
|
|
|
Nucor
stockholders
|
$
233,772
|
|
$
124,755
|
|
$
304,526
|
|
$
192,555
|
|
|
|
|
|
|
|
|
Net earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$0.73
|
|
$0.39
|
|
$0.95
|
|
$0.60
|
Diluted
|
$0.73
|
|
$0.39
|
|
$0.95
|
|
$0.60
|
|
|
|
|
|
|
|
|
Average shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
319,360
|
|
320,506
|
|
319,299
|
|
320,409
|
Diluted
|
319,578
|
|
320,708
|
|
319,435
|
|
320,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 2,
2016
|
|
Dec. 31,
2015
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
1,781,150
|
|
$
1,939,469
|
|
Short-term
investments
|
|
550,000
|
|
100,000
|
|
Accounts
receivable, net
|
|
1,789,942
|
|
1,383,823
|
|
Inventories,
net
|
|
2,288,134
|
|
2,145,444
|
|
Other
current assets
|
|
129,272
|
|
185,644
|
|
|
|
|
|
|
|
|
|
|
Total
current assets
|
|
6,538,498
|
|
5,754,380
|
|
|
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
4,816,988
|
|
4,891,153
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
2,030,551
|
|
2,011,278
|
|
|
|
|
|
|
|
|
Other
intangible assets, net
|
|
740,788
|
|
770,672
|
|
|
|
|
|
|
|
|
Other
assets
|
|
797,758
|
|
799,461
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
14,924,583
|
|
$
14,226,944
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Short-term
debt
|
|
$
19,951
|
|
$
51,315
|
|
Accounts
payable
|
|
1,023,213
|
|
566,527
|
|
Federal
income taxes payable
|
|
47,059
|
|
-
|
|
Salaries,
wages and related accruals
|
|
319,633
|
|
289,004
|
|
Accrued
expenses and other current liabilities
|
|
526,252
|
|
478,327
|
|
|
|
|
|
|
|
|
|
|
Total
current liabilities
|
|
1,936,108
|
|
1,385,173
|
|
|
|
|
|
|
|
|
Long-term
debt due after one year
|
|
4,337,561
|
|
4,337,145
|
|
|
|
|
|
|
|
|
Deferred
credits and other liabilities
|
|
730,205
|
|
718,613
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
7,003,874
|
|
6,440,931
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
Nucor
stockholders' equity:
|
|
|
|
|
|
Common
stock
|
|
151,592
|
|
151,426
|
|
Additional
paid-in capital
|
|
1,943,886
|
|
1,918,970
|
|
Retained
earnings
|
|
7,319,961
|
|
7,255,972
|
|
Accumulated
other comprehensive loss,
|
|
|
|
|
|
|
net of
income taxes
|
|
(281,378)
|
|
(351,362)
|
|
Treasury
stock
|
|
(1,560,298)
|
|
(1,558,128)
|
|
|
Total Nucor
stockholders' equity
|
|
7,573,763
|
|
7,416,878
|
|
|
|
|
|
|
|
|
Noncontrolling interests
|
|
346,946
|
|
369,135
|
|
|
|
|
|
|
|
|
|
|
Total
equity
|
|
7,920,709
|
|
7,786,013
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and equity
|
|
$
14,924,583
|
|
$
14,226,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
Six Months (26
Weeks) Ended
|
|
|
|
|
|
|
|
|
|
July 2,
2016
|
|
July 4,
2015
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
Net
earnings
|
$
362,797
|
|
$
243,636
|
|
Adjustments:
|
|
|
|
|
|
Depreciation
|
306,088
|
|
314,521
|
|
|
Amortization
|
35,587
|
|
36,895
|
|
|
Stock-based
compensation
|
37,576
|
|
33,947
|
|
|
Deferred income
taxes
|
(4,281)
|
|
(35,383)
|
|
|
Distributions from
affiliates
|
37,026
|
|
12,142
|
|
|
Equity in earnings
of unconsolidated affiliates
|
(16,064)
|
|
(435)
|
|
|
Changes in assets
and liabilities (exclusive of acquisitions and
dispositions):
|
|
|
|
|
|
|
Accounts
receivable
|
(398,266)
|
|
254,343
|
|
|
|
Inventories
|
(136,019)
|
|
472,104
|
|
|
|
Accounts
payable
|
452,815
|
|
(159,872)
|
|
|
|
Federal income
taxes
|
129,325
|
|
128,391
|
|
|
|
Salaries, wages
and related accruals
|
32,091
|
|
(77,214)
|
|
|
|
Other operating
activities
|
18,290
|
|
(28,371)
|
|
|
|
|
|
|
Cash provided by
operating activities
|
856,965
|
|
1,194,704
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
Capital
expenditures
|
(227,342)
|
|
(175,253)
|
|
Investment in and
advances to affiliates
|
(12,508)
|
|
(23,750)
|
|
Disposition of
plant and equipment
|
11,631
|
|
17,932
|
|
Acquisitions (net
of cash acquired)
|
-
|
|
(253)
|
|
Purchases of
investments
|
(550,000)
|
|
(111,927)
|
|
Proceeds from the
sale of investments
|
100,000
|
|
100,000
|
|
Other investing
activities
|
6,265
|
|
1,870
|
|
|
|
|
|
Cash used in
investing activities
|
(671,954)
|
|
(191,381)
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
Net change in
short-term debt
|
(31,375)
|
|
(164,466)
|
|
Repayment of
long-term debt
|
-
|
|
(8,000)
|
|
Issuance of common
stock
|
1,882
|
|
423
|
|
Excess tax
benefits from stock-based compensation
|
916
|
|
1,200
|
|
Distributions to
noncontrolling interests
|
(78,684)
|
|
(39,347)
|
|
Cash
dividends
|
(240,302)
|
|
(239,476)
|
|
Acquisition of
treasury stock
|
(5,173)
|
|
-
|
|
Other financing
activities
|
(4,630)
|
|
(1,081)
|
|
|
|
|
|
|
Cash used in
financing activities
|
(357,366)
|
|
(450,747)
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
14,036
|
|
(224)
|
|
|
|
|
|
|
(Decrease)
increase in cash and cash equivalents
|
(158,319)
|
|
552,352
|
|
|
|
|
|
|
Cash and cash
equivalents - beginning of year
|
1,939,469
|
|
1,024,144
|
|
|
|
|
|
|
Cash and cash
equivalents - end of six months
|
$
1,781,150
|
|
$
1,576,496
|
|
|
|
|
|
|
Non-cash investing
activity:
|
|
|
|
|
Change in accrued
plant and equipment purchases
|
$
2,630
|
|
$
(12,644)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/nucor-reports-results-for-second-quarter-and-first-half-of-2016-300302035.html
SOURCE Nucor Corporation