NUE
$57.50
Nucor
($.50)
(.86%)
Earnings Details
4th Quarter December 2018
Tuesday, January 29, 2019 9:00:00 AM
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Summary

Nucor Beats

Nucor (NUE) reported 4th Quarter December 2018 earnings of $2.07 per share on revenue of $6.3 billion. The consensus earnings estimate was $1.93 per share on revenue of $6.3 billion. The Earnings Whisper number was $1.95 per share. Revenue grew 23.6% on a year-over-year basis.

Nucor Corp and its affiliates are manufacturer of steel and steel products. It also produces direct reduced iron for use in the Company’s steel mills.

Results
Reported Earnings
$2.07
Earnings Whisper
$1.95
Consensus Estimate
$1.93
Reported Revenue
$6.30 Bil
Revenue Estimate
$6.29 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Nucor Reports Record Annual Earnings for 2018

CHARLOTTE, N.C., Jan. 29, 2019 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today record consolidated net earnings of $2.36 billion, or $7.42 per diluted share, for 2018 compared to $1.32 billion, or $4.10 per diluted share, for 2017.  The new earnings record of $7.42 per diluted share in 2018 is a 24% increase as compared to the Company's previous record earnings of $5.98 per diluted share reported in 2008.    

Nucor reported consolidated net earnings of $646.8 million, or $2.07 per diluted share, for the fourth quarter of 2018. By comparison, Nucor reported consolidated net earnings of $676.7 million, or $2.13 per diluted share, for the third quarter of 2018 and $383.9 million, or $1.20 per diluted share, for the fourth quarter of 2017.  Consolidated net earnings of $646.8 million reported in the fourth quarter of 2018 represents the strongest fourth quarter performance in the Company's history.

"The best way to sum up 2018 is this - it was a record year for Nucor. We posted record earnings per share and record revenue, and we shipped a record amount of steel," said John Ferriola, Nucor's Chairman, Chief Executive Officer and President.  "Over the past decade, we have been positioning Nucor to take full advantage of an upturn in the steel market. During that time, we invested more than $9 billion to increase the Company's peak earnings power. These investments enhanced our competitive strengths by building on our product diversity and market leadership positions.  Our 2018 financial results demonstrate that Nucor's disciplined strategy of investing for profitable growth is working." 

Selected Segment Data
In the first quarter of 2018, the Company began reporting its tubular products and piling businesses as part of the steel products segment. These businesses were previously included in the steel mills segment. All prior period segment data presented in this news release has been recast to reflect this change. Earnings (loss) before income taxes and noncontrolling interests by segment were as follows for the fourth quarter and full year 2018 and 2017 (in thousands):



Three Months (13 Weeks) Ended


Twelve Months (52 Weeks) Ended



Dec. 31, 2018


Dec. 31, 2017


Dec. 31, 2018


Dec. 31, 2017

Steel mills


$        882,438


$        324,275


$     3,500,085


$     1,953,075

Steel products


86,837


100,515


467,105


337,978

Raw materials


55,773


26,721


236,241


129,296

Corporate/eliminations

(147,772)


(129,270)


(974,040)


(670,392)



$        877,276


$        322,241


$     3,229,391


$     1,749,957

 

Financial Review
For 2018, Nucor's consolidated net sales increased 24% to $25.07 billion, compared with $20.25 billion for 2017. In 2018, Nucor posted its highest consolidated sales in the Company's history, surpassing Nucor's previous record by 6%. Total tons shipped to outside customers in 2018 were 27,899,000, an increase of 5% from 2017, while average sales price per ton increased 18%.

Nucor's consolidated net sales decreased 7% to $6.30 billion in the fourth quarter of 2018 compared with $6.74 billion in the third quarter of 2018 and increased 24% compared with $5.09 billion in the fourth quarter of 2017. Average sales price per ton decreased 2% compared to the third quarter of 2018 and increased 21% compared to the fourth quarter of 2017. Total tons shipped to outside customers were 6,687,000 tons in the fourth quarter of 2018, a 5% decrease from the third quarter of 2018 and an increase of 2% from the fourth quarter of 2017. Total fourth quarter steel mill shipments decreased 6% from the third quarter of 2018 and increased 2% from the fourth quarter of 2017. Fourth quarter downstream steel products shipments to outside customers decreased 10% from the third quarter of 2018 and decreased 1% from the fourth quarter of 2017.

Third quarter 2018 results included a non-cash impairment charge of $110.0 million, or $0.26 per diluted share, related to our proved producing natural gas well assets.  Also included in the third quarter of 2018 earnings was a benefit of $24.8 million, or $0.06 per diluted share, related to insurance recoveries. Fourth quarter of 2017 results included a net benefit of $175.2 million, or $0.55 per diluted share, related to the impacts of U.S. federal tax legislation enacted in the fourth quarter of 2017.

The average scrap and scrap substitute cost per gross ton used in the fourth quarter of 2018 was $359, a 4% decrease compared to $374 in the third quarter of 2018 and a 13% increase compared to $317 in the fourth quarter of 2017. The average scrap and scrap substitute cost per gross ton used for the full year 2018 was $361, an 18% increase from $307 for the full year 2017.

Overall operating rates at our steel mills decreased to 88% in the fourth quarter of 2018 as compared to 92% in the third quarter of 2018 and increased compared to 82% in the fourth quarter of 2017. Steel mill operating rates for the full year 2018 increased to 91% as compared to 86% for the full year 2017.

Total steel mill energy costs in the fourth quarter of 2018 increased approximately $2 per ton compared to the third quarter of 2018 and increased approximately $1 compared to the fourth quarter of 2017. The increases from the third quarter of 2018 and fourth quarter of 2017 were mainly due to higher natural gas unit costs. Energy costs for the full year 2018 decreased approximately $1 per ton from the full year 2017 mainly due to lower unit costs for natural gas.

Our liquidity position remains strong with approximately $1.4 billion in cash and cash equivalents as of December 31, 2018 and an untapped $1.5 billion revolving credit facility that does not expire until April 2023.

During the fourth quarter of 2018, Nucor repurchased approximately 8.4 million shares of its common stock for an average price of $60.19 per share.  At December 31, 2018, Nucor had approximately 305,591,000 shares outstanding and approximately $1.5 billion available under its share repurchase program.

Recent Developments
In November 2018, Nucor's board of directors declared a cash dividend of $0.40 per share payable on February 11, 2019 to stockholders of record on December 31, 2018. This dividend is Nucor's 183rd consecutive quarterly cash dividend, and it marks 46 consecutive years of an increased base dividend. Over the past ten years, Nucor has returned more than $5 billion in capital to its stockholders in the form of base dividends, supplemental dividends and share repurchases.

In January 2019, Nucor announced that it will build a state-of-the-art plate mill in the U.S. Midwest. Nucor's board of directors approved an investment of $1.35 billion to build the mill, which is expected to be fully operational in 2022 and will be capable of producing approximately 1.2 million tons per year of steel plate products. This advanced mill will provide us enhanced ability to serve customers in the region, which is the largest plate-consuming area in the U.S., and to meet all the steel needs of customers around the country.  The site for the new mill is anticipated to be selected early this year.

Fourth Quarter Analysis
As expected, the fourth quarter of 2018 was another strong quarter for Nucor. Earnings in the fourth quarter of 2018 declined from the third quarter of 2018 due in part to typical seasonality. The profitability of the steel mills segment decreased from the third quarter of 2018 due to lower shipments across the segment and lower average selling prices at our sheet, bar and structural mills.  The performance of our steel products segment decreased from the third quarter of 2018 due to some decline in our tubular products group, which experienced a strong third quarter, and our rebar fabrication businesses. The raw materials segment's performance decreased in the fourth quarter of 2018 as compared to the third quarter of 2018 due to decreased earnings of our DRI businesses.

Outlook
Following 2018's record-setting earnings performance, we believe that 2019 will be another strong year as we expect the earnings performance to be one of the best in Nucor's history. As we enter 2019, we have a positive outlook on end-use demand and general economic conditions.

We expect another strong quarter for earnings in the first quarter of 2019. Although sheet pricing and margins are expected to decrease in the first quarter of 2019 as compared to the fourth quarter of 2018, this will be partially offset by expected increases in profitability of our bar mills and structural mills. The performance of the raw materials segment is expected to decrease in the first quarter of 2019 as compared to the fourth quarter of 2018 due to the decreased performance of our DRI businesses, which continue to be negatively impacted by declining average selling prices for raw materials that began in the fourth quarter of 2018. The profitability of our steel products segment in the first quarter of 2019 is expected to be similar to the fourth quarter of 2018. We expect first quarter of 2019 earnings to be much stronger than the first quarter of 2018.

About Nucor
Nucor and its affiliates are manufacturers of steel and 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; hollow structural section tubing; electrical conduit; 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 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 "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) 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 the changes in the supply and cost of raw materials, including scrap steel; (4) market demand for steel products; and (5) 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 2017 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.

Broadcast of Conference Call
You are invited to listen to the live broadcast of Nucor's conference call in which management will discuss Nucor's fourth quarter results on January 29, 2019 at 2:00 p.m. Eastern time. The conference call will be available over the Internet at www.nucor.com.

 TONNAGE DATA 

 (in thousands) 
















 Three Months (13 Weeks) Ended 


 Twelve Months (52 Weeks) Ended 



Dec. 31, 2018


Dec. 31, 2017


Percentage Change


Dec. 31, 2018


Dec. 31, 2017


Percentage Change

Steel mills total shipments:













Sheet 

2,573


2,566


-


10,789


10,607


2%


Bars

2,014


1,982


2%


8,895


8,009


11%


Structural

615


504


22%


2,437


2,111


15%


Plate

630


556


13%


2,418


2,300


5%


Other

56


173


-68%


350


590


-41%



5,888


5,781


2%


24,889


23,617


5%














Sales tons to outside customers:













Steel mills

4,765


4,629


3%


19,890


19,137


4%


Joist

135


140


-4%


490


472


4%


Deck

127


128


-1%


479


457


5%


Cold finished

132


126


5%


569


487


17%


Fabricated concrete













reinforcing steel

274


285


-4%


1,225


1,142


7%


Piling

127


144


-12%


565


564


-


Tubular products

229


225


2%


1,058


917


15%


Other

898


865


4%


3,623


3,316


9%



6,687


6,542


2%


27,899


26,492


5%

 

 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)










Three Months (13 Weeks) Ended


Twelve Months (52 Weeks) Ended










Dec. 31, 2018


Dec. 31, 2017


Dec. 31, 2018


Dec. 31, 2017









Net sales

$    6,295,884


$    5,092,328


$  25,067,279


$  20,252,393









Costs, expenses and other:








  Cost of products sold

5,183,622


4,571,760


20,771,871


17,682,986

  Marketing, administrative and other expenses

209,300


168,102


860,722


687,531

  Equity in earnings of unconsolidated affiliates

(6,083)


(11,860)


(40,240)


(41,661)

  Impairment of assets

-


-


110,000


-

  Interest expense, net

31,769


42,085


135,535


173,580


5,418,608


4,770,087


21,837,888


18,502,436

Earnings before income taxes and








noncontrolling interests

877,276


322,241


3,229,391


1,749,957

Provision for income taxes

196,206


(72,853)


748,307


369,386

Net earnings

681,070


395,094


2,481,084


1,380,571

Earnings attributable to








noncontrolling interests

34,291


11,203


120,317


61,883









Net earnings attributable to 








Nucor stockholders

$        646,779


$        383,891


$    2,360,767


$    1,318,688









Net earnings per share:








  Basic

$2.08


$1.20


$7.44


$4.11

  Diluted

$2.07


$1.20


$7.42


$4.10









Average shares outstanding:








  Basic

309,804


319,210


315,858


319,990

  Diluted

310,447


319,967


316,733


320,773

 

 

 CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) 

 (In thousands) 












Dec. 31, 2018


Dec. 31, 2017

 ASSETS 





 Current assets: 





 Cash and cash equivalents 

$      1,398,886


$          949,104


 Short-term investments 

-


50,000


 Accounts receivable, net 

2,505,568


2,028,545


 Inventories, net 

4,553,500


3,461,686


 Other current assets 

178,311


335,085










 Total current assets 

8,636,265


6,824,420








 Property, plant and equipment, net 

5,334,748


5,093,147








 Goodwill 


2,184,336


2,196,058








 Other intangible assets, net 

828,504


914,646








 Other assets 

936,735


812,987










 Total assets 

$   17,920,588


$    15,841,258








 LIABILITIES 





 Current liabilities: 





 Short-term debt 

$           57,870


$            52,833


 Long-term debt due within one year 

-


500,000


 Accounts payable 

1,428,191


1,181,346


 Salaries, wages and related accruals 

709,397


516,660


 Accrued expenses and other current liabilities 

610,842


573,925










 Total current liabilities 

2,806,300


2,824,764








 Long-term debt due after one year 

4,233,276


3,242,242








 Deferred credits and other liabilities 

679,044


689,464










 Total liabilities 

7,718,620


6,756,470

 EQUITY 





 Nucor stockholders' equity: 





 Common stock 

152,061


151,960


 Additional paid-in capital 

2,073,715


2,021,339


 Retained earnings 

10,337,445


8,463,709


 Accumulated other comprehensive loss, 






 net of income taxes 

(304,133)


(254,681)


 Treasury stock 

(2,467,010)


(1,643,291)










 Total Nucor stockholders' equity 

9,792,078


8,739,036








 Noncontrolling interests 

409,890


345,752










 Total equity 

10,201,968


9,084,788










 Total liabilities and equity 

$   17,920,588


$    15,841,258

 

 

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 

 (In thousands) 
















Twelve Months (52 Weeks) Ended
















Dec. 31, 2018


Dec. 31, 2017








Operating activities:







Net earnings 



$                2,481,084


$        1,380,571


Adjustments:








Depreciation



630,879


635,833



Amortization



88,758


91,228



Stock-based compensation


73,422


64,176



Deferred income taxes


3,017


(221,173)



Distributions from affiliates


30,196


49,295



Equity in earnings of unconsolidated affiliates

(40,240)


(41,661)



Impairment of assets


110,000


-



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







Accounts receivable


(485,433)


(329,501)




Inventories


(1,092,101)


(900,946)




Accounts payable


235,572


314,817




Federal income taxes


163,743


(107,577)




Salaries, wages and related accruals

204,796


87,700




Other operating activities

(9,741)


32,576










Cash provided by operating activities


2,393,952


1,055,338










Investing activities:







Capital expenditures


(982,531)


(448,555)


Investment in and advances to affiliates

(121,412)


(59,000)


Disposition of plant and equipment

31,589


25,315


Acquisitions (net of cash acquired)

(33,063)


(544,041)


Purchases of investments


-


(50,000)


Proceeds from the sale of investments

50,000


150,000


Other investing activities


25,348


7,389










Cash used in investing activities


(1,030,069)


(918,892)










Financing activities:







Net change in short-term debt


5,037


34,872


Proceeds from long-term debt, net of discount

995,710


-


Repayment of long-term debt


(500,000)


(600,000)


Bond issuance related costs


(7,625)


-


Issuance of common stock


24,101


7,070


Payment of tax withholdings on certain stock-based compensation

(22,123)


(14,408)


Distributions to noncontrolling interests

(56,179)


(90,974)


Cash dividends



(485,376)


(485,321)


Acquisition of treasury stock


(853,997)


(90,304)


Other financing activities


(7,725)


(3,241)










Cash used in financing activities 


(908,177)


(1,242,306)










Effect of exchange rate changes on cash

(5,924)


9,003










Increase (decrease) in cash and cash equivalents

449,782


(1,096,857)










Cash and cash equivalents - beginning of year

949,104


2,045,961










Cash and cash equivalents - end of year

$                1,398,886


$           949,104










Non-cash investing activity:






Change in accrued plant and equipment purchases and 





assets acquired by capital lease arrangements

$                      14,725


$             58,519










 

Cision View original content:http://www.prnewswire.com/news-releases/nucor-reports-record-annual-earnings-for-2018-300785869.html

SOURCE Nucor Corporation