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Nucor Reports First Quarter 2010 Results
04/23/2010 - Nucor reports consolidated net earnings of $31.0 million on consolidated net sales of $3.65 billion for the first quarter of 2010.
Nucor Corp. announced consolidated net earnings of $31.0 million on consolidated net sales of $3.65 billion for the first quarter of 2010.
The $31.0 million ($0.10 per diluted share) consolidated net earnings compare to earnings of $58.9 million ($0.18 per diluted share) in the previous quarter (4Q2009) and a net loss of $189.6 million ($0.60 per diluted share) in the year-ago first quarter.
The $3.65 billion consolidated net sales reflect a 24% increase compared with $2.94 billion in the previous quarter, an increase the company said is due to a 19% improvement in total tons shipped to outside customers and a 5% increase in average sales price per ton. Consolidated net sales also reflect a 38% increase compared with $2.65 billion in the first quarter of 2009, with the increase attributed to a 48% increase in total tons shipped to outside customers, partially offset by a 7% decrease in average sales price per ton.
The average scrap and scrap substitute cost per ton used during the first quarter of 2010 was $318, a 15% increase from $276 in the previous quarter (4Q2009) and a 5% decrease compared to $333 in the year-ago first quarter.
In the first quarter, Nucor incurred a $24.0-million charge to value inventories using the last-in, first-out (LIFO) method of accounting, which compares with $116.9 million credit in the previous quarter (4Q2009) and a $105.0 million credit in the year-ago first quarter.
Nucor’s steel mill utilization rate reached approximately 73% in the first quarter, up from 58% in the previous quarter (4Q2009) and 45% in last year's first quarter. The increased utilization helped to decrease total energy costs by approximately $1 per ton (vs. the previous quarter) and by approximately $10 per ton (vs. the first quarter of 2009).
Pre-operating and start-up costs of new facilities were $50.5 million in the first quarter, primarily related to the SBQ mill in Memphis, Tenn., and the galvanizing line in Decatur, Ala. By comparison, pre-operating and start-up costs were $48.1 million in the previous quarter and $33.2 million in the year-ago first quarter.
The company said its liquidity position remains strong with $2.0 billion in cash and cash equivalents and short-term investments and an untapped $1.3 billion revolving credit facility that matures in November 2012.
In March, the David J. Joseph Company acquired the assets and business of Ocala Recycling LLC, which operates four facilities in Florida, including one automobile shredder. David J. Joseph Company operates the four yards, which represent a total annual production volume of over 100,000 tons, as part of Trademark Metals Recycling LLC.
Following the first quarter, Nucor acquired a 50% interest in NuMit LLC, which will invest in various steel and steel-related activities, both in North America and globally. As part of the agreement, Mitsui and Co. (U.S.A.), Inc., a wholly owned subsidiary of Mitsui and Co., Ltd., contributed 100% of Steel Technologies Inc., which operates 23 sheet steel processing facilities throughout the U.S., Canada and Mexico. The transaction is not expected to result in material goodwill.
Noting that its operating performance had continued to improve throughout the first quarter, the company said that it expects the second quarter to be an improvement over first quarter results. Nucor said the most challenging of its markets continue to be those associated with residential and non-residential construction, which continue to show little, if any, strength, particularly for the company’s downstream businesses.
The company noted that it would provide additional and more quantitative earnings guidance after the midpoint between quarterly earnings releases.
Nucor and affiliates manufacture steel products, with operating facilities primarily in the U.S. and Canada. Products produced include carbon and alloy steel bars, beams, sheet and plate; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; light gauge steel framing; steel grating and expanded metal; and wire and wire mesh. Nucor, through 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.
