Nucor Corp. announced consolidated net earnings of US$147.0 million, or US$0.46 per diluted share, for the second quarter of 2014. By comparison, Nucor reported net earnings of US$111.0 million, or US$0.35 per diluted share, in the first quarter of 2014 and net earnings of US$85.1 million, or US$0.27 per diluted share, in the second quarter of 2013. Second quarter of 2014 diluted net earnings per share of US$0.46 was above our guidance range of US$0.35 to US$0.40 per diluted share due to better than forecasted performance in the steel mills segment.
 
In the first half of 2014, Nucor reported consolidated net earnings of US$258.1 million, or US$0.80 per diluted share, compared with consolidated net earnings of US$169.9 million, or US$0.53 per diluted share, in the first half of last year.
 
Nucor's results include no charge to value inventories using the last-in, first-out (LIFO) method of accounting in the second quarter of 2014, compared with a charge of US$14.5 million (US$0.03 per diluted share) recorded in the first quarter of 2014 and no charge in the second quarter of 2013.  As a result, the LIFO charge in the first half of 2014 was US$14.5 million (US$0.03 per diluted share), compared with a charge of US$18.0 million (US$0.03 per diluted share) in the first half of 2013. The second quarter of 2014 included US$20.3 million (US$0.04 per diluted share) of higher employee stock-based compensation expense than the first quarter of 2014 and was comparable to the second quarter of 2013 due to the timing of annual grants that are typically authorized in June of each year. Included in the first quarter of 2014 earnings was a US$12.8 million (US$0.04 per diluted share) charge primarily related to tax legislation changes in the state of New York. Also included in first quarter results was a US$9.0 million charge (US$0.02 per diluted share) related to the disposal of assets within the steel mills segment.
 
Nucor's consolidated net sales increased 4% to US$5.29 billion in the second quarter of 2014 compared with US$5.11 billion in the first quarter of 2014 and increased 13% compared with US$4.67 billion in the second quarter of 2013. Average sales price per ton increased 1% over the first quarter of 2014 and increased 4% over the second quarter of 2013. Total tons shipped to outside customers were 6,370,000 tons in the second quarter of 2014, a 3% increase over the first quarter of 2014 and an increase of 9% over the second quarter of 2013.  Total second quarter steel mill shipments increased 1% over the first quarter of 2014 and 9% over the second quarter of 2013.  Second quarter downstream steel products shipments to outside customers increased 17% over the first quarter of 2014 and increased 11% over the second quarter of 2013.
 
In the first half of 2014, Nucor's consolidated net sales increased 13% to US$10.40 billion, compared with US$9.22 billion in last year's first half. Total tons shipped to outside customers increased 9% from the first half of 2013, while average sales price per ton increased 4%.
 
The average scrap and scrap substitute cost per ton used in the second quarter of 2014 was US$384, a 4% decrease from US$398 in the first quarter of 2014 and an increase of 2% over US$377 in the second quarter of 2013. The average scrap and scrap substitute cost per ton used in the first half of 2014 was US$391, an increase of 3% over US$378 in the first half of 2013.
 
Overall operating rates at Nucor’s steel mills increased to 79% in the second quarter of 2014 as compared with 75% in the first quarter of 2014 and 73% in the second quarter of 2013. Steel mill utilization increased to 77% in the first half of 2014 from 73% in the first half of 2013.
 
Total steel mill energy costs in the second quarter of 2014 decreased approximately US$3 per ton compared with the first quarter of 2014 and increased US$1 per ton over the second quarter of 2013. Energy costs for the first half of 2014 increased US$3 per ton over the first half of 2013 due to increased natural gas and electricity unit costs.
 
The company’s liquidity position remains strong with US$1.17 billion in cash and cash equivalents and short-term investments and an untapped US$1.5 billion revolving credit facility that does not expire until August 2018.
 
In June, Nucor's board of directors declared a cash dividend of US$0.37 per share payable on 11 August 2014 to stockholders of record on 30 June 2014. This dividend is Nucor's 165th consecutive quarterly cash dividend, a record we expect to continue.
 
Second quarter of 2014 earnings increased compared with the first quarter of 2014 due in large part to improved performance by the steel mills segment, particularly at our sheet and bar mills. Sheet steel profitability improved because of higher sales volumes and margin improvement due to continued strong demand and supply disruptions at some of our competitors.  Our bar mills also benefited from higher sales volumes and margin improvement.  Nucor-Yamato Steel underwent a planned three week outage in the second quarter which contributed to decreased volumes for structural steel. The improved results of the steel mills segment were achieved despite imports being at levels not seen since 2006. Our fabricated construction products businesses (rebar fabrication, joist and decking and pre-engineered metal buildings) returned to solid profitability in the second quarter of 2014, reflecting improving conditions in the nonresidential construction markets.
 
The performance of our raw materials segment decreased in the second quarter of 2014 compared with the first quarter of 2014 due to an operating loss at our new direct reduced iron (DRI) plant in St. James Parish, Louisiana, which was consistent with our guidance. The Louisiana DRI plant underwent a three week outage in the second quarter to implement adjustments that will improve yield and conversion costs. The Louisiana DRI plant has continued to exceed our volume expectations while producing excellent quality DRI units. Also within the raw materials segment, The David J. Joseph Company experienced decreased profitability in the second quarter of 2014 compared to the first quarter of 2014 due to lower scrap selling prices.
 
Nucor currently expects to see a stronger improvement in earnings for the third quarter of 2014.  Although non-residential construction markets remain at historically low levels, they are improving at a moderate pace.  It therefore expects further increased operating profits in our downstream products businesses.  Steel mill profitability is also expected to improve in the third quarter of 2014 as the Nucor-Yamato Steel division has no planned outage and sheet and plate margins continue to benefit from positive pricing trends.  It also expects improvement in the performance of the Louisiana DRI facility in the third quarter, with profitable performance anticipated by the end of the year.
  

TONNAGE DATA
(in thousands)
			Three Months (13 Weeks) Ended						Six Months (26 Weeks) Ended
			July 5, 2014		June 29, 2013		Percentage Change		July 5, 2014		June 29, 2013		Percentage Change
Steel mills production			5,324		4,892		9%		10,518		9,710		8%
Steel mills total shipments			5,477		5,025		9%		10,909		10,100		8%
Sales tons to outside customers:
	Steel mills		4,646		4,274		9%		9,246		8,608		7%
	Joist		97		91		7%		189		162		17%
	Deck		101		83		22%		188		152		24%
	Cold finished		133		124		7%		271		246		10%
	Fabricated concrete
	reinforcing steel		321		280		15%		560		508		10%
	Other		1,072		987		9%		2,105		1,869		13%
			6,370		5,839		9%		12,559		11,545		9%

 
 

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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 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.