Financial News

Nucor Reports Results for Third Quarter of 2020

CHARLOTTE, N.C., Oct. 22, 2020 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) today announced consolidated net earnings of $193.4 million, or $0.63 per diluted share, for the third quarter of 2020. By comparison, Nucor reported consolidated net earnings of $108.9 million, or $0.36 per diluted share, for the second quarter of 2020 and $275.0 million, or $0.90 per diluted share, for the third quarter of 2019.

In the first nine months of 2020, Nucor generated consolidated net earnings of $322.6 million, or $1.06 per diluted share, compared with consolidated net earnings of $1.16 billion, or $3.78 per diluted share, in the first nine months of 2019.

"I am incredibly proud of how our team has responded to the many challenges of 2020 beginning with the health, safety and well-being of our entire Nucor family.  Our third quarter results were better than we expected, reflecting continued strength in nonresidential construction. We expect improved performance in the fourth quarter due to positive pricing momentum in sheet and plate markets. Our teammates across the company continue to find unique ways to serve our customers while bringing innovative product solutions into the market," said Leon Topalian, Nucor's President and Chief Executive Officer.

Financial Strength
At the end of the third quarter of 2020, Nucor had $3.41 billion in cash and cash equivalents, short-term investments and restricted cash and cash equivalents on hand. The Company's $1.50 billion revolving credit facility remains undrawn and does not expire until April 2023.  Nucor continues to have the strongest credit rating in the North American steel sector (Baa1/A-) with stable outlooks at both Moody's and Standard & Poor's.

Selected Segment Data
Earnings (loss) before income taxes and noncontrolling interests by segment for the third quarter and first nine months of 2020 and 2019 were as follows (in thousands):



Three Months (13 Weeks) Ended



Nine Months (39 Weeks) Ended




Oct. 3, 2020



Sept. 28, 2019



Oct. 3, 2020



Sept. 28, 2019


Steel mills


$

205,152



$

309,939



$

512,082



$

1,578,257


Steel products



186,976




170,214




502,409




363,731


Raw materials



6,232




(10,599)




(3,068)




64,333


Corporate/eliminations



(107,942)




(89,215)




(393,651)




(401,744)




$

290,418



$

380,339



$

617,772



$

1,604,577


 

Financial Review
Included in earnings for the third quarter of 2020 was a restructuring charge of $16.4 million, or $0.04 per diluted share, related to the realignment of Nucor's metal buildings business. 

Nucor's consolidated net sales increased 14% to $4.93 billion in the third quarter of 2020 compared with $4.33 billion in the second quarter of 2020 and decreased 10% compared with $5.46 billion in the third quarter of 2019. Average sales price per ton in the third quarter of 2020 decreased 2% compared with the second quarter of 2020 and decreased 7% compared with the third quarter of 2019. A total of 6,367,000 tons was shipped to outside customers in the third quarter of 2020, a 16% increase from the second quarter of 2020 and a 3% decrease from the third quarter of 2019. Total steel mill shipments in the third quarter of 2020 increased 18% as compared to the second quarter of 2020 and decreased 3% as compared to the third quarter of 2019. Steel mill shipments to internal customers represented 21% of total steel mill shipments in each of the third quarter of 2020, the second quarter of 2020 and the third quarter of 2019. Downstream steel product shipments to outside customers in the third quarter of 2020 increased 14% from the second quarter of 2020 and remained flat compared to the third quarter of 2019.

In the first nine months of 2020, Nucor's consolidated net sales of $14.88 billion decreased 15% compared with consolidated net sales of $17.46 billion reported in the first nine months of 2019. Total tons shipped to outside customers in the first nine months of 2020 were 19,033,000, a decrease of 5% from the first nine months of 2019, while the average sales price per ton in the first nine months of 2020 decreased 10% from the first nine months of 2019.

The average scrap and scrap substitute cost per gross ton used in the third quarter of 2020 was $277, a 2% decrease compared to $284 in the second quarter of 2020 and a 7% decrease compared to $299 in the third quarter of 2019. The average scrap and scrap substitute cost per gross ton used in the first nine months of 2020 was $285, a 13% decrease compared to $328 in the first nine months of 2019.

Pre-operating and start-up costs related to the Company's growth projects were approximately $22 million, or $0.06 per diluted share, in the third quarter of 2020, compared with approximately $22 million, or $0.06 per diluted share, in the second quarter of 2020 and approximately $28 million, or $0.07 per diluted share, in the third quarter of 2019.

In the first nine months of 2020, pre-operating and start-up costs related to the Company's growth projects were approximately $73 million, or $0.18 per diluted share, compared with approximately $68 million, or $0.17 per diluted share, in the first nine months of 2019.

Overall operating rates at the Company's steel mills increased to 83% in the third quarter of 2020 as compared to 68% in the second quarter of 2020 and were flat relative to the third quarter of 2019. Operating rates in the first nine months of 2020 decreased to 80% as compared to 85% in the first nine months of 2019.

Third Quarter of 2020 Analysis
Nonresidential construction market conditions remained strong throughout the quarter, while the automotive market's recovery accelerated. The results of the steel mills segment improved in the third quarter of 2020 as compared to the second quarter of 2020, led by Nucor's bar and structural mills. Market conditions for the Company's sheet and plate mills remained challenged. The Company's steel products segment had another strong quarter due to the continued resiliency of nonresidential construction markets, and, as expected, earnings for the third quarter of 2020 increased compared with the second quarter of 2020 for this segment. Third quarter of 2020 earnings in Nucor's raw materials segment increased as compared to the second quarter of 2020 due to improved pricing reflecting stronger steel demand.

Fourth Quarter of 2020 Outlook
The ongoing COVID-19 pandemic continues to cause uncertainty, making it difficult to accurately forecast future market conditions and demand trends. While many of the markets Nucor serves have typically experienced a seasonal slowdown in the fourth quarter, the Company expects higher earnings in the fourth quarter of 2020 as compared to the third quarter of 2020 due primarily to improved pricing at its sheet and plate mills. Nucor also expects the raw materials segment's earnings to increase in the fourth quarter of 2020 as compared to the third quarter of 2020 due to the improved margins at the Company's direct reduced iron facilities.

Cash Dividend
On September 10, 2020, Nucor's board of directors declared a cash dividend of $0.4025 per share. This cash dividend is payable on November 10, 2020 to stockholders of record as of September 30, 2020 and is Nucor's 190th consecutive quarterly cash dividend.

Earnings Conference Call
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, 2020 at 2:00 p.m. eastern time. The conference call will be available over the Internet at www.nucor.com, under Investors.

About Nucor
Nucor and its affiliates are manufacturers of steel and steel products, with operating facilities in the United States, Canada and Mexico. 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; precision castings; 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 hot briquetted iron / direct reduced iron; 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 "anticipate," "believe," "expect," "project," "may," "will," "should," "could" and similar expressions are intended to identify those forward-looking statements. These forward-looking statements reflect the Company's best judgment based on current information, and although we base these statements on circumstances that we believe to be reasonable when made, there can be no assurance that future events will not affect the accuracy of such forward-looking information. As such, the forward-looking statements are not guarantees of future performance, and actual results may vary materially from the projected results and expectations discussed in this news release. 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 pressure 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 changes in the supply and cost of raw materials, including pig iron, iron ore and scrap steel; (4) market demand for steel products, which, in the case of many of our products, is driven by the level of nonresidential construction activity in the United States, as well as prevailing domestic prices for oil and gas; (5) energy costs and availability; and (6) the impact of the COVID-19 pandemic. These and other factors are discussed in Nucor's regulatory filings with the Securities and Exchange Commission, including those in "Item 1A. Risk Factors" of Nucor's Annual Report on Form 10-K for the year ended December 31, 2019 and in "Item 1A. Risk Factors" of Nucor's Quarterly Report on Form 10-Q for the quarter ended July 4, 2020. 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, except as may be required by applicable law.

 

Tonnage Data

(In thousands)
















Three Months (13 Weeks) Ended


Nine Months (39 Weeks) Ended



Oct. 3, 2020


Sept. 28, 2019


Percent Change


Oct. 3, 2020


Sept. 28, 2019


Percent Change

Steel mills total shipments:













Sheet


2,469


2,659


-7%


7,345


7,915


-7%

Bars


2,119


2,029


4%


6,092


6,050


1%

Structural


553


562


-2%


1,754


1,682


4%

Plate


424


470


-10%


1,472


1,605


-8%

Other


61


68


-10%


230


325


-29%



5,626


5,788


-3%


16,893


17,577


-4%














Sales tons to outside customers:













Steel mills


4,442


4,559


-3%


13,382


14,013


-5%

Joist


153


133


15%


406


359


13%

Deck


129


132


-2%


365


354


3%

Cold finished


99


116


-15%


300


390


-23%

Fabricated concrete reinforcing steel


328


342


-4%


948


929


2%

Piling


186


160


16%


522


462


13%

Tubular products


280


272


3%


816


780


5%

Other steel products


92


107


-14%


278


303


-8%

Raw materials


658


734


-10%


2,016


2,456


-18%



6,367


6,555


-3%


19,033


20,046


-5%

 

 

Condensed Consolidated Statements of Earnings (Unaudited)


(In thousands, except per share data)





















Three Months (13 Weeks) Ended



Nine Months (39 Weeks) Ended




Oct. 3, 2020



Sept. 28, 2019



Oct. 3, 2020



Sept. 28, 2019


Net sales


$

4,927,960



$

5,464,502



$

14,879,603



$

17,457,112


Costs, expenses and other:

















Cost of products sold



4,425,765




4,891,991




13,370,181




15,213,215


Marketing, administrative and other expenses



165,513




159,301




460,922




549,020


Equity in losses (earnings) of unconsolidated affiliates



(479)




1,585




14,422




(2,459)


Losses on assets



6,604




-




299,450




-


Interest expense, net



40,139




31,286




116,856




92,759





4,637,542




5,084,163




14,261,831




15,852,535


Earnings before income taxes and noncontrolling interests



290,418




380,339




617,772




1,604,577


Provision for income taxes



67,788




86,752




207,610




367,920


Net earnings



222,630




293,587




410,162




1,236,657


Earnings attributable to noncontrolling interests



29,215




18,556




87,535




73,337


Net earnings attributable to Nucor stockholders


$

193,415



$

275,031



$

322,627



$

1,163,320


Net earnings per share:

















Basic


$

0.63



$

0.90



$

1.06



$

3.79


Diluted


$

0.63



$

0.90



$

1.06



$

3.78


Average shares outstanding:

















Basic



303,394




304,637




303,072




305,553


Diluted



303,441




304,980




303,099




306,029


 

 

Condensed Consolidated Balance Sheets (Unaudited)


(In thousands)













Oct. 3, 2020



Dec. 31, 2019


ASSETS









Current assets:









Cash and cash equivalents


$

2,866,578



$

1,534,605


Short-term investments



412,401




300,040


Accounts receivable, net



2,119,421




2,160,102


Inventories, net



3,260,685




3,842,095


Other current assets



306,762




389,528


Total current assets



8,965,847




8,226,370


Property, plant and equipment, net



6,829,733




6,178,555


Restricted cash and cash equivalents



131,623




-


Goodwill



2,195,788




2,201,063


Other intangible assets, net



678,558




742,186


Other assets



717,728




996,492


Total assets


$

19,519,277



$

18,344,666


LIABILITIES









Current liabilities:









Short-term debt


$

63,778



$

62,444


Current portion of long-term debt and finance lease obligations



10,475




29,264


Accounts payable



1,210,987




1,201,698


Salaries, wages and related accruals



432,767




510,844


Accrued expenses and other current liabilities



655,288




659,524


Total current liabilities



2,373,295




2,463,774


Long-term debt and finance lease obligations due after one year



5,452,193




4,291,301


Deferred credits and other liabilities



976,722




798,415


Total liabilities



8,802,210




7,553,490


EQUITY









Nucor stockholders' equity:









Common stock



152,061




152,061


Additional paid-in capital



2,117,582




2,107,646


Retained earnings



11,068,908




11,115,056


Accumulated other comprehensive loss,

    net of income taxes



(315,469)




(302,966)


Treasury stock



(2,720,668)




(2,713,931)


Total Nucor stockholders' equity



10,302,414




10,357,866


Noncontrolling interests



414,653




433,310


Total equity



10,717,067




10,791,176


Total liabilities and equity


$

19,519,277



$

18,344,666


 

Condensed Consolidated Statements of Cash Flows (Unaudited)


(In thousands)













Nine Months (39 Weeks) Ended




Oct. 3, 2020



Sept. 28, 2019


Operating activities:









Net earnings


$

410,162



$

1,236,657


Adjustments:









Depreciation



525,688




477,957


Amortization



62,877




64,655


Stock-based compensation



56,122




74,311


Deferred income taxes



140,606




76,737


Distributions from affiliates



3,021




27,405


Equity in losses (earnings) of unconsolidated affiliates



14,422




(2,459)


Losses on assets



299,450




-


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









Accounts receivable



37,547




197,783


Inventories



590,434




476,761


Accounts payable



15,366




(180,397)


Federal income taxes



18,848




(177,405)


Salaries, wages and related accruals



(69,235)




(157,317)


Other operating activities



100,283




5,526


Cash provided by operating activities



2,205,591




2,120,214


Investing activities:









Capital expenditures



(1,179,081)




(984,646)


Investment in and advances to affiliates



(16,542)




(27,613)


Divestiture of affiliates



-




67,591


Disposition of plant and equipment



19,492




32,922


Acquisitions (net of cash acquired)



(20,368)




(9,495)


Purchase of investments



(401,986)




(249,616)


Proceeds from the sale of investments



301,249




-


Other investing activities



(33,536)




2,176


Cash used in investing activities



(1,330,772)




(1,168,681)


Financing activities:









Net change in short-term debt



1,334




(10,145)


Proceeds from long-term debt, net of discount



1,237,635




-


Repayment of long-term debt



(97,150)




-


Bond issuance related costs



(6,250)




-


Issuance of common stock



-




5,892


Payment of tax withholdings on certain stock-based compensation



(17,691)




(15,723)


Distributions to noncontrolling interests



(106,193)




(71,241)


Cash dividends



(368,636)




(369,270)


Acquisition of treasury stock



(39,499)




(197,511)


Other financing activities



(6,983)




(6,538)


Cash provided by (used in) financing activities



596,567




(664,536)


Effect of exchange rate changes on cash



(7,790)




482


Increase in cash and cash equivalents



1,463,596




287,479


Cash and cash equivalents - beginning of year



1,534,605




1,398,886


Cash and cash equivalents  and restricted cash and cash equivalents- end of nine months


$

2,998,201



$

1,686,365


Non-cash investing activity:









Change in accrued plant and equipment purchases


$

-



$

62,700


 

Cision View original content:http://www.prnewswire.com/news-releases/nucor-reports-results-for-third-quarter-of-2020-301157774.html

SOURCE Nucor Corporation

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