Nucor Reports First Quarter 2012 Results
04/20/2012 - Nucor Corp. announced consolidated net earnings of $145.1 million, or $0.46 per diluted share, for the first quarter of 2012, compared to net earnings of $159.8 million, or $0.50 per diluted share, for the first quarter of 2011 and net earnings of $137.1 million, or $0.43 per diluted share, in the fourth quarter of 2011.
Nucor Corp. announced consolidated net earnings of $145.1 million, or $0.46 per diluted share, for the first quarter of 2012, compared to net earnings of $159.8 million, or $0.50 per diluted share, for the first quarter of 2011 and net earnings of $137.1 million, or $0.43 per diluted share, in the fourth quarter of 2011. Diluted earnings per share of $0.46 for the first quarter are greater than the company’s guidance range of $0.30 to $0.35 per share due primarily to actual March shipments to outside customers in the steel mills segment exceeding expectations.
Nucor incurred a charge to value inventories using the last-in, first-out (LIFO) method of accounting of $14.5 million ($0.03 per diluted share) in the first quarter of 2012, compared with a charge of $31.0 million ($0.06 per diluted share) in the first quarter of 2011 and a charge of $51.8 million ($0.11 per diluted share) in the fourth quarter of 2011.
Nucor's consolidated net sales increased 5% to $5.07 billion compared with $4.83 billion in the first quarter of 2011 due to a 6% increase in average sales price per ton partially offset by a 1% decrease in total tons shipped to outside customers. Consolidated net sales increased 5% compared with $4.83 billion in the fourth quarter of 2011 due to a 1% increase in average sales price per ton and a 4% increase in total tons shipped to outside customers. First quarter downstream steel products shipments to outside customers increased 3% over the first quarter of 2011 and decreased 3% from the fourth quarter of 2011.
The average scrap and scrap substitute cost per ton used during the first quarter of 2012 was $445, an increase of 5% over $424 in the first quarter of 2011 and an increase of 1% compared to $441 in the fourth quarter of 2011.
Overall operating rates at the company’s steel mills remained relatively flat at approximately 79% in the first quarter of 2012 as compared to 80% in the first quarter of 2011, but increased from 71% in the fourth quarter of 2011.
Total energy costs in the first quarter of 2012 decreased approximately $2 per ton compared to both the first and fourth quarters of 2011, due mainly to decreased unit costs for natural gas.
Nucor noted that construction is going well on its 2,500,000-ton DRI facility in Louisiana. The majority of the equipment is expected to arrive in 2012, and the company is on schedule for completion of construction and beginning of start-up in mid-2013.
During the first quarter of 2012, the David J. Joseph Co. (DJJ), through its wholly owned subsidiaries, acquired three metal recycling companies that are expected to strengthen and expand its regional recycling platforms. These acquisitions will provide an estimated additional annual capacity of 275,000 tons.
In February, Nucor’s board declared a cash dividend of $0.365 per share payable on May 11, 2012, to stockholders of record on March 30, 2012. This dividend is Nucor’s 156th consecutive quarterly cash dividend.
The company says that the results for the first quarter of 2012 reflect a flattening in the favorable pricing and margin trends that began mid-quarter and an unexpected margin weakness in its raw materials business. The deterioration in steel mill pricing and margin trends compared to Nucor’s earlier expectations is due to a resurgence in imports and increased competition from new and restarted domestic sheet mill supply.
For the second quarter of 2012, the company expects to see a modest improvement in earnings. Construction markets remain very challenging, with evidence of only slight improvements at this time, according to Nucor. End markets such as automotive, heavy equipment, energy and general manufacturing have continued to experience improvements in demand, primarily benefitting special bar quality, sheet and plate products.
Nucor and 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 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 Co., 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.
