Nucor Reports Record Quarterly Earnings for the Second Quarter of 2021

Rhea-AI Summary

Nucor Corporation (NYSE: NUE) reported record second quarter consolidated net earnings of $1.51 billion, or $5.04 per diluted share, marking a significant increase from $942.4 million in Q1 2021 and $108.9 million in Q2 2020. For the first half of 2021, earnings reached $2.45 billion, or $8.13 per diluted share, surpassing its full year record of $7.42 set in 2018. Overall sales increased 25% to $8.79 billion compared to Q1 2021, driven by strong demand across steel markets. Nucor expects to break its quarterly earnings record again in Q3 2021.

Positive

• Record quarterly net earnings of $1.51 billion for Q2 2021.
• Second quarter earnings per diluted share of $5.04, highest in company history.
• Consolidated net sales increased 25% to $8.79 billion from Q1 2021.
• First half earnings of $2.45 billion surpassed full year record set in 2018.

Negative

• A non-cash impairment charge of $42 million affecting earnings.
• Average scrap costs increased 49% year-over-year.

CHARLOTTE, N.C., July 22, 2021 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) today announced record quarterly consolidated net earnings of $1.51 billion, or $5.04 per diluted share, for the second quarter of 2021. By comparison, Nucor reported consolidated net earnings of $942.4 million, or $3.10 per diluted share, for the first quarter of 2021 and $108.9 million, or $0.36 per diluted share, for the second quarter of 2020.  

In the first six months of 2021, Nucor reported consolidated net earnings of $2.45 billion, or $8.13 per diluted share, compared with consolidated net earnings of $129.2 million, or $0.42 per diluted share, in the first six months of 2020.

"Nucor's second quarter earnings of $5.04 per diluted share marks the highest quarterly earnings in the Company's history. Additionally, first half earnings of $8.13 per diluted share exceeds our full year diluted earnings per share record of $7.42 set in 2018. We expect to set a new record for quarterly earnings in the third quarter of 2021 as demand remains robust and virtually all the steel end use markets that we monitor are growing," said Leon Topalian, Nucor's President and Chief Executive Officer. "We are thankful to our customers and grateful for the strategic partnerships and successes we've achieved together. Congratulations to our teammates for all you do to make these outstanding results possible."

Selected Segment Data
Earnings (loss) before income taxes and noncontrolling interests by segment for the second quarter and first six months of 2021 and 2020 were as follows (in thousands):

		Three Months (13 Weeks) Ended								Six Months (26 Weeks) Ended
		July 3, 2021				July 4, 2020				July 3, 2021				July 4, 2020
Steel mills		$	2,174,807			$	150,424			$	3,489,781			$	306,930
Steel products			259,330				152,874				471,142				315,433
Raw materials			120,143				(1,389)				343,378				(9,300)
Corporate/eliminations			(528,532)				(120,852)				(980,307)				(285,709)
		$	2,025,748			$	181,057			$	3,323,994			$	327,354

The steel mills segment and the steel products segment both set a record for the highest quarterly earnings before income taxes and noncontrolling interests in the second quarter of 2021.

Financial Review
Nucor's consolidated net sales increased 25% to $8.79 billion in the second quarter of 2021 compared with $7.02 billion in the first quarter of 2021 and increased 103% compared with $4.33 billion in the second quarter of 2020. Average sales price per ton in the second quarter of 2021 increased 20% compared with the first quarter of 2021 and increased 49% compared with the second quarter of 2020. A total of 7,482,000 tons were shipped to outside customers in the second quarter of 2021, a 4% increase from the first quarter of 2021 and a 37% increase from the second quarter of 2020. Total steel mill shipments in the second quarter of 2021 increased 3% as compared to the first quarter of 2021 and increased 41% as compared to the second quarter of 2020. Steel mill shipments to internal customers represented 20% of total steel mill shipments in the second quarter of 2021, compared with 21% in both the first quarter of 2021 and the second quarter of 2020. Downstream steel product shipments to outside customers in the second quarter of 2021 increased 9% from the first quarter of 2021 and increased 18% from the second quarter of 2020.

In the first six months of 2021, Nucor's consolidated net sales of $15.81 billion were an increase of  59% compared with consolidated net sales of $9.95 billion reported in the first six months of 2020. Total tons shipped to outside customers in the first six months of 2021 were 14,658,000, an increase of 16% from the first six months of 2020, while the average sales price per ton in the first six months of 2021 increased 37% from the first six months of 2020.

The average scrap and scrap substitute cost per gross ton used in the second quarter of 2021 was $457, a 13% increase compared to $405 in the first quarter of 2021 and a 61% increase compared to $284 in the second quarter of 2020. The average scrap and scrap substitute cost per gross ton used in the first six months of 2021 was $431, a 49% increase compared to $289 in the first six months of 2020.

Included in the second quarter of 2021 earnings is a $42.0 million, or $0.11 per diluted share, non-cash impairment charge related to our leasehold interest in unproved oil and natural gas properties. This charge is included in the raw materials segment.

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 second quarter of 2021, compared with approximately $19 million, or $0.05 per diluted share, in the first quarter of 2021 and approximately $22 million, or $0.06 per diluted share, in the second quarter of 2020.

In the first six months of 2021, pre-operating and start-up costs related to the Company's growth projects were approximately $41 million, or $0.10 per diluted share, compared with approximately $51 million, or $0.13 per diluted share, in the first six months of 2020.

Overall operating rates at the Company's steel mills increased to 97% in the second quarter of 2021 as compared to 95% in the first quarter of 2021 and 68% in the second quarter of 2020. Operating rates in the first six months of 2021 increased to 96% as compared to 79% in the first six months of 2020.

Financial Strength
At the end of the second quarter of 2021, we had $3.21 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.

Commitment to Returning Capital to Stockholders
In May 2021, the board of directors approved the repurchase of up to $3.00 billion of the Company's common stock and terminated any previously authorized repurchase programs. Share repurchases will be made from time to time in the open market at prevailing market prices or through private transactions or block trades. The timing and amount of repurchases will depend on market conditions, share price, applicable legal requirements and other factors. The share repurchase authorization is discretionary and has no expiration date.

During the second quarter of 2021, Nucor repurchased approximately 6.8 million shares of its common stock at an average price of $90.80 per share (12.1 million shares year-to-date at an average price of $75.43 per share). As of July 3, 2021, Nucor had approximately 293,695,000 shares outstanding and approximately $2.80 billion remaining for repurchases under its newly authorized share repurchase program.

On June 8, 2021, Nucor's board of directors declared a cash dividend of $0.405 per share. This cash dividend is payable on August 11, 2021 to stockholders of record as of June 30, 2021 and is Nucor's 193^rd consecutive quarterly cash dividend.

Second Quarter of 2021 Analysis
All three operating segments are continuing to generate robust profitability as overall strong demand is supporting higher average selling prices. Earnings of the steel mills segment significantly improved in the second quarter of 2021 as compared to the first quarter of 2021, primarily driven by the significant increase in profitability of our sheet and plate mills. The steel products segment's earnings in the second quarter of 2021 also increased from the first quarter of 2021. The steel mills segment and the steel products segment set new records for profitability in the second quarter of 2021. After setting a new record for segment earnings in the first quarter of 2021, earnings from the raw materials segment decreased in the second quarter of 2021 due to increased raw material input costs and the previously mentioned impairment charge.

Third Quarter of 2021 Outlook
We expect earnings in the third quarter of 2021 to be the highest quarterly earnings in Nucor history, surpassing the record set in the second quarter of 2021. The primary drivers for the expected increase in earnings in the third quarter of 2021 are improved pricing and margins in the steel mills segment. We expect increased profitability across the steel mills segment, with the largest increase at our sheet mills. The steel products segment and the raw materials segment are expected to have increased earnings in the third quarter of 2021 compared to the second quarter of 2021. 

Earnings Conference Call
You are invited to listen to the live broadcast of Nucor's conference call during which management will discuss Nucor's second quarter results on July 22, 2021 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," "intend," "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 market steel prices and changes in the supply and cost of raw materials, including pig iron, iron ore and scrap steel; (4) the availability and cost of electricity and natural gas, which could negatively affect our cost of steel production or result in a delay or cancellation of existing or future drilling within our natural gas drilling programs; (5) critical equipment failures and business interruptions; (6) 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; (7) impairment in the recorded value of inventory, equity investments, fixed assets, goodwill or other long-lived assets; (8) uncertainties surrounding the global economy, including excess world capacity for steel production; (9) fluctuations in currency conversion rates; (10) significant changes in laws or government regulations affecting environmental compliance, including legislation and regulations that result in greater regulation of greenhouse gas emissions that could increase our energy costs, capital expenditures and operating costs or cause one or more of our permits to be revoked or make it more difficult to obtain permit modifications; (11) the cyclical nature of the steel industry; (12) capital investments and their impact on our performance; (13) our safety performance; and (14) 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, 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						Six Months (26 Weeks) Ended
		July 3, 2021		July 4, 2020		Percent Change		July 3, 2021		July 4, 2020		Percent Change
Steel mills total shipments:
Sheet		2,913		2,002		46%		5,840		4,876		20%
Bars		2,423		1,731		40%		4,742		3,973		19%
Structural		681		517		32%		1,304		1,201		9%
Plate		599		438		37%		1,195		1,048		14%
Other		118		81		46%		197		169		17%
		6,734		4,769		41%		13,278		11,267		18%
Sales tons to outside customers:
Steel mills		5,356		3,758		43%		10,546		8,940		18%
Joist		167		122		37%		339		253		34%
Deck		130		111		17%		265		236		12%
Cold finished		128		75		71%		260		201		29%
Rebar fabrication products		338		309		9%		620		620		-
Piling		171		156		10%		307		336		-9%
Tubular products		269		249		8%		519		536		-3%
Other steel products		109		87		25%		209		186		12%
Raw materials		814		612		33%		1,593		1,358		17%
		7,482		5,479		37%		14,658		12,666		16%

 

Condensed Consolidated Statements of Earnings (Unaudited)
(In thousands, except per share data)
		Three Months (13 Weeks) Ended								Six Months (26 Weeks) Ended
		July 3, 2021				July 4, 2020				July 3, 2021				July 4, 2020
Net sales		$	8,789,164			$	4,327,306			$	15,806,304			$	9,951,643
Costs, expenses and other:
Cost of products sold			6,315,661				3,949,347				11,710,364				8,944,416
Marketing, administrative and other expenses			387,070				142,017				678,194				295,409
Equity in (earnings) losses of unconsolidated affiliates			(19,403)				14,078				(32,642)				14,901
Losses on assets			44,308				5,000				50,970				292,846
Interest expense, net			35,780				35,807				75,424				76,717
			6,763,416				4,146,249				12,482,310				9,624,289
Earnings before income taxes and noncontrolling interests			2,025,748				181,057				3,323,994				327,354
Provision for income taxes			454,289				47,904				765,021				139,822
Net earnings			1,571,459				133,153				2,558,973				187,532
Earnings attributable to noncontrolling interests			64,591				24,272				109,673				58,320
Net earnings attributable to Nucor stockholders		$	1,506,868			$	108,881			$	2,449,300			$	129,212
Net earnings per share:
Basic		$	5.05			$	0.36			$	8.14			$	0.42
Diluted		$	5.04			$	0.36			$	8.13			$	0.42
Average shares outstanding:
Basic			296,817				302,921				299,359				302,915
Diluted			297,529				302,933				299,738				302,932

 

Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
		July 3, 2021				Dec. 31, 2020
ASSETS
Current assets:
Cash and cash equivalents		$	2,722,656			$	2,639,671
Short-term investments			398,409				408,004
Accounts receivable, net			3,399,076				2,298,850
Inventories, net			5,240,750				3,569,089
Other current assets			295,048				573,048
Total current assets			12,055,939				9,488,662
Property, plant and equipment, net			7,235,536				6,899,110
Restricted cash and cash equivalents			84,350				115,258
Goodwill			2,241,558				2,229,672
Other intangible assets, net			627,201				668,021
Other assets			750,998				724,671
Total assets		$	22,995,582			$	20,125,394
LIABILITIES
Current liabilities:
Short-term debt		$	100,686			$	57,906
Current portion of long-term debt and finance lease obligations			12,027				10,885
Accounts payable			2,204,137				1,432,159
Salaries, wages and related accruals			850,396				462,727
Accrued expenses and other current liabilities			712,704				664,183
Total current liabilities			3,879,950				2,627,860
Long-term debt and finance lease obligations due after one year			5,275,496				5,271,789
Deferred credits and other liabilities			1,130,485				993,884
Total liabilities			10,285,931				8,893,533
EQUITY
Nucor stockholders' equity:
Common stock			152,061				152,061
Additional paid-in capital			2,117,155				2,121,288
Retained earnings			13,550,406				11,343,852
Accumulated other comprehensive loss,     net of income taxes			(73,729)				(118,861)
Treasury stock			(3,491,915)				(2,709,675)
Total Nucor stockholders' equity			12,253,978				10,788,665
Noncontrolling interests			455,673				443,196
Total equity			12,709,651				11,231,861
Total liabilities and equity		$	22,995,582			$	20,125,394

 

Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
		Six Months (26 Weeks) Ended
		July 3, 2021				July 4, 2020
Operating activities:
Net earnings		$	2,558,973			$	187,532
Adjustments:
Depreciation			362,492				349,691
Amortization			41,858				42,165
Stock-based compensation			66,729				39,101
Deferred income taxes			102,367				90,515
Distributions from affiliates			180				2,000
Equity in losses (earnings) of unconsolidated affiliates			(32,642)				14,901
Losses on assets			50,970				292,846
Changes in assets and liabilities (exclusive of acquisitions and dispositions):
Accounts receivable			(1,093,021)				264,424
Inventories			(1,673,962)				464,004
Accounts payable			726,649				(272,910)
Federal income taxes			290,287				26,145
Salaries, wages and related accruals			385,265				(142,388)
Other operating activities			97,041				(8,058)
Cash provided by operating activities			1,883,186				1,349,968
Investing activities:
Capital expenditures			(702,378)				(777,317)
Investment in and advances to affiliates			(169)				(9,756)
Disposition of plant and equipment			10,665				17,652
Acquisitions (net of cash acquired)			300				794
Purchase of investments			(357,917)				(222,500)
Proceeds from the sale of investments			367,512				275,067
Other investing activities			587				1,132
Cash used in investing activities			(681,400)				(714,928)
Financing activities:
Net change in short-term debt			42,780				2,208
Proceeds from issuance of long-term debt, net of discount			-				1,074,995
Repayment of long-term debt			-				(77,150)
Bond issuance related costs			-				(6,250)
Proceeds from exercise of stock options			128,800				-
Payment of tax withholdings on certain stock-based compensation			(64,416)				(17,263)
Distributions to noncontrolling interests			(97,196)				(62,965)
Cash dividends			(246,539)				(245,619)
Acquisition of treasury stock			(916,145)				(39,499)
Other financing activities			(5,072)				(4,645)
Cash (used in) provided by financing activities			(1,157,788)				623,812
Effect of exchange rate changes on cash			8,079				(4,268)
Increase in cash and cash equivalents and restricted cash and cash equivalents			52,077				1,254,584
Cash and cash equivalents and restricted cash and cash equivalents - beginning of year			2,754,929				1,534,605
Cash and cash equivalents and restricted cash and cash equivalents - end of six months		$	2,807,006			$	2,789,189
Non-cash investing activity:
Change in accrued plant and equipment purchases		$	44,754			$	(25,897)

 

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SOURCE Nucor Corporation

FAQ

What were Nucor's earnings for Q2 2021?

Nucor reported a record quarterly consolidated net earnings of $1.51 billion, or $5.04 per diluted share for Q2 2021.

How did Nucor's Q2 2021 sales compare to previous quarters?

Sales increased by 25% to $8.79 billion in Q2 2021 compared to $7.02 billion in Q1 2021.

What is Nucor's forecast for Q3 2021 earnings?

Nucor expects to set a new record for quarterly earnings in Q3 2021 driven by improved pricing and margins.

How much did Nucor earn in the first half of 2021?

Nucor reported consolidated net earnings of $2.45 billion, or $8.13 per diluted share for the first half of 2021.

What is the trend in average sales price per ton for Nucor?

The average sales price per ton in Q2 2021 increased by 20% from Q1 2021 and by 49% from Q2 2020.