Nucor Reports Record Quarterly Earnings for the Second Quarter of 2022
Nucor Corporation (NYSE: NUE) reported record quarterly net earnings of $2.56 billion, or $9.67 per diluted share, for Q2 2022, surpassing Q1 2022 earnings of $2.10 billion. Year-to-date earnings reached $4.66 billion, compared to $2.45 billion in the first half of 2021. Total net sales increased by 12% from Q1 2022 to $11.79 billion, and by 34% year-over-year. Steel mills and products segments showed profitable growth, with steel mill shipments up 11% from Q1. Nucor also repurchased 5.1 million shares in Q2, continuing its commitment to return capital to shareholders.
- Record quarterly net earnings: $2.56 billion, or $9.67 per diluted share.
- Year-to-date earnings of $4.66 billion, a significant increase from $2.45 billion in H1 2021.
- Net sales grew 12% quarter-over-quarter to $11.79 billion, and 34% year-over-year.
- Steel mills segment earnings strengthened, with shipments up 11% from Q1 2022.
- Repurchased 5.1 million shares at an average price of $157.37 per share.
- Expected sequential decrease in steel mills segment earnings for Q3 2022 due to lower shipment volumes and prices.
- Total tons shipped to outside customers decreased by 9% in the first six months of 2022 compared to the same period in 2021.
CHARLOTTE, N.C., July 21, 2022 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) today announced record quarterly consolidated net earnings of
In the first six months of 2022, Nucor reported consolidated net earnings of
"Nucor's second quarter earnings of
Selected Segment Data
Earnings (loss) before income taxes and noncontrolling interests by segment for the second quarter and first six months of 2022 and 2021 were as follows (in thousands):
Three Months (13 Weeks) Ended | Six Months (26 Weeks) Ended | |||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||
Steel mills | $ | 2,815,723 | $ | 2,174,807 | $ | 5,394,577 | $ | 3,489,781 | ||||||||
Steel products | 1,129,932 | 259,330 | 1,814,799 | 471,142 | ||||||||||||
Raw materials | 263,598 | 120,143 | 359,451 | 343,378 | ||||||||||||
Corporate/eliminations | (718,851) | (528,532) | (1,180,310) | (980,307) | ||||||||||||
$ | 3,490,402 | $ | 2,025,748 | $ | 6,388,517 | $ | 3,323,994 | |||||||||
Financial Review
Nucor's consolidated net sales increased
In the first six months of 2022, Nucor's consolidated net sales of
The average scrap and scrap substitute cost per gross ton used in the second quarter of 2022 was
Pre-operating and start-up costs related to the Company's growth projects were approximately
In the first six months of 2022, pre-operating and start-up costs related to the Company's growth projects were approximately
Overall operating rates at the Company's steel mills increased to
Financial Strength
At the end of the second quarter of 2022, we had
Commitment to Returning Capital to Stockholders
During the second quarter of 2022, Nucor repurchased approximately 5.1 million shares of its common stock at an average price of
On June 9, 2022, Nucor's board of directors declared a cash dividend of
Second Quarter of 2022 Analysis
Second quarter earnings were driven by increased profitability in the steel products segment, which continued to benefit from robust demand in nonresidential construction markets. In addition, the steel mills segment earnings strengthened due primarily to increased profitability at our bar and plate mills. Similarly, Nucor's raw materials segment generated increased profits in the second quarter due to relatively higher selling prices for both direct reduced iron (DRI) and scrap. The second quarter also saw the closing of Nucor's acquisition of C.H.I. Overhead Doors, LLC.
Third Quarter of 2022 Outlook
As we enter the third quarter, demand remains stable and resilient across the major end-use markets we serve, and customer inventory levels appear right-sized relative to economic conditions. Though we expect a decrease from the record-setting second quarter, we expect another strong quarter of profitability in the third quarter of 2022. We believe that 2022 will be the most profitable year in Nucor's history.
We expect the steel mills segment earnings to be sequentially lower in the third quarter of 2022, due to lower expected shipment volumes and average selling prices, particularly at our sheet and plate mills. The steel products segment is expected to have another very strong quarter in the third quarter of 2022, with earnings roughly in-line with the second quarter of 2022. Raw materials segment earnings are expected to improve in the third quarter of 2022 due to higher realized pricing at our DRI facilities.
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 21, 2022 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 racking; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; precision castings; steel fasteners; metal building systems; insulated metal panels; overhead doors; steel grating; and wire and wire mesh. Nucor, through The David J. Joseph Company and its affiliates, 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 which we expect will or may occur in the future and may impact our business, financial condition and results of operations. 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, inflation and interest rate changes; (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; (14) our ability to integrate the operations of C.H.I. Overhead Doors, LLC and certain of its affiliates; and (15) the impact of the COVID-19 pandemic and any variants of the virus. These and other factors are discussed in Nucor's regulatory filings with the United States 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, 2021. 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 2, 2022 | July 3, 2021 | Percent | July 2, 2022 | July 3, 2021 | Percent | |||||||||||||||||||
Steel mills total shipments: | ||||||||||||||||||||||||
Sheet | 2,934 | 2,913 | 1 | % | 5,319 | 5,840 | -9 | % | ||||||||||||||||
Bars | 2,273 | 2,423 | -6 | % | 4,559 | 4,742 | -4 | % | ||||||||||||||||
Structural | 624 | 681 | -8 | % | 1,264 | 1,304 | -3 | % | ||||||||||||||||
Plate | 474 | 599 | -21 | % | 872 | 1,195 | -27 | % | ||||||||||||||||
Other | 143 | 118 | 21 | % | 248 | 197 | 26 | % | ||||||||||||||||
6,448 | 6,734 | -4 | % | 12,262 | 13,278 | -8 | % | |||||||||||||||||
Sales tons to outside customers: | ||||||||||||||||||||||||
Steel mills | 5,041 | 5,356 | -6 | % | 9,580 | 10,546 | -9 | % | ||||||||||||||||
Joist | 158 | 167 | -5 | % | 337 | 339 | -1 | % | ||||||||||||||||
Deck | 123 | 130 | -5 | % | 259 | 265 | -2 | % | ||||||||||||||||
Cold finished | 123 | 128 | -4 | % | 256 | 260 | -2 | % | ||||||||||||||||
Rebar fabrication products | 339 | 338 | 0 | % | 630 | 620 | 2 | % | ||||||||||||||||
Piling | 119 | 171 | -30 | % | 230 | 307 | -25 | % | ||||||||||||||||
Tubular products | 274 | 269 | 2 | % | 504 | 519 | -3 | % | ||||||||||||||||
Other steel products | 175 | 109 | 61 | % | 330 | 209 | 58 | % | ||||||||||||||||
Raw materials | 625 | 814 | -23 | % | 1,245 | 1,593 | -22 | % | ||||||||||||||||
6,977 | 7,482 | -7 | % | 13,371 | 14,658 | -9 | % | |||||||||||||||||
Condensed Consolidated Statements of Earnings (Unaudited) | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Three Months (13 Weeks) Ended | Six Months (26 Weeks) Ended | |||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||
Net sales | $ | 11,794,474 | $ | 8,789,164 | $ | 22,287,756 | $ | 15,806,304 | ||||||||
Costs, expenses and other: | ||||||||||||||||
Cost of products sold | 7,690,211 | 6,315,661 | 14,725,354 | 11,710,364 | ||||||||||||
Marketing, administrative and other expenses | 563,211 | 387,070 | 1,087,795 | 678,194 | ||||||||||||
Equity in earnings of unconsolidated affiliates | (7,113) | (19,403) | (14,808) | (32,642) | ||||||||||||
Losses on assets | - | 44,308 | - | 50,970 | ||||||||||||
Interest expense, net | 57,763 | 35,780 | 100,898 | 75,424 | ||||||||||||
8,304,072 | 6,763,416 | 15,899,239 | 12,482,310 | |||||||||||||
Earnings before income taxes and noncontrolling interests | 3,490,402 | 2,025,748 | 6,388,517 | 3,323,994 | ||||||||||||
Provision for income taxes | 763,165 | 454,289 | 1,434,165 | 765,021 | ||||||||||||
Net earnings | 2,727,237 | 1,571,459 | 4,954,352 | 2,558,973 | ||||||||||||
Earnings attributable to noncontrolling interests | 166,004 | 64,591 | 297,496 | 109,673 | ||||||||||||
Net earnings attributable to Nucor stockholders | $ | 2,561,233 | $ | 1,506,868 | $ | 4,656,856 | $ | 2,449,300 | ||||||||
Net earnings per share: | ||||||||||||||||
Basic | $ | 9.69 | $ | 5.05 | $ | 17.34 | $ | 8.14 | ||||||||
Diluted | $ | 9.67 | $ | 5.04 | $ | 17.30 | $ | 8.13 | ||||||||
Average shares outstanding: | ||||||||||||||||
Basic | 263,221 | 296,817 | 267,416 | 299,359 | ||||||||||||
Diluted | 263,719 | 297,529 | 268,066 | 299,738 | ||||||||||||
Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
(In thousands) | ||||||||
July 2, 2022 | Dec 31, 2021 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 2,002,708 | $ | 2,364,858 | ||||
Short-term investments | 363,287 | 253,005 | ||||||
Accounts receivable, net | 4,749,600 | 3,853,972 | ||||||
Inventories, net | 6,579,142 | 6,011,182 | ||||||
Other current assets | 339,074 | 316,540 | ||||||
Total current assets | 14,033,811 | 12,799,557 | ||||||
Property, plant and equipment, net | 9,213,600 | 8,114,818 | ||||||
Restricted cash and cash equivalents | 88,262 | 143,800 | ||||||
Goodwill | 3,929,503 | 2,827,344 | ||||||
Other intangible assets, net | 3,429,149 | 1,103,759 | ||||||
Other assets | 974,132 | 833,794 | ||||||
Total assets | $ | 31,668,457 | $ | 25,823,072 | ||||
LIABILITIES | ||||||||
Current liabilities: | ||||||||
Short-term debt | $ | 100,509 | $ | 107,723 | ||||
Current portion of long-term debt and finance lease obligations | 629,171 | 615,678 | ||||||
Accounts payable | 2,315,796 | 1,974,041 | ||||||
Salaries, wages and related accruals | 1,239,617 | 1,495,166 | ||||||
Accrued expenses and other current liabilities | 1,074,108 | 964,805 | ||||||
Total current liabilities | 5,359,201 | 5,157,413 | ||||||
Long-term debt and finance lease obligations due after one year | 6,621,685 | 4,961,410 | ||||||
Deferred credits and other liabilities | 1,834,763 | 1,100,455 | ||||||
Total liabilities | 13,815,649 | 11,219,278 | ||||||
Commitments and contingencies | ||||||||
EQUITY | ||||||||
Nucor stockholders' equity: | ||||||||
Common stock | 152,061 | 152,061 | ||||||
Additional paid-in capital | 2,115,178 | 2,140,608 | ||||||
Retained earnings | 22,064,383 | 17,674,100 | ||||||
Accumulated other comprehensive loss, net of income taxes | (70,810) | (115,282) | ||||||
Treasury stock | (7,452,168) | (5,835,098) | ||||||
Total Nucor stockholders' equity | 16,808,644 | 14,016,389 | ||||||
Noncontrolling interests | 1,044,164 | 587,405 | ||||||
Total equity | 17,852,808 | 14,603,794 | ||||||
Total liabilities and equity | $ | 31,668,457 | $ | 25,823,072 | ||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||
(In thousands) | ||||||||
Six Months (26 Weeks) Ended | ||||||||
July 2, 2022 | July 3, 2021 | |||||||
Operating activities: | ||||||||
Net earnings | $ | 4,954,352 | $ | 2,558,973 | ||||
Adjustments: | ||||||||
Depreciation | 397,270 | 362,492 | ||||||
Amortization | 87,267 | 41,858 | ||||||
Stock-based compensation | 74,219 | 66,729 | ||||||
Deferred income taxes | (36,220) | 102,367 | ||||||
Distributions from affiliates | 2,287 | 180 | ||||||
Equity in earnings of unconsolidated affiliates | (14,808) | (32,642) | ||||||
Losses on assets | - | 50,970 | ||||||
Changes in assets and liabilities (exclusive of acquisitions and dispositions): | ||||||||
Accounts receivable | (648,569) | (1,093,021) | ||||||
Inventories | (157,976) | (1,673,962) | ||||||
Accounts payable | 198,062 | 726,649 | ||||||
Federal income taxes | 33,441 | 290,287 | ||||||
Salaries, wages and related accruals | (252,758) | 385,265 | ||||||
Other operating activities | 97,174 | 97,041 | ||||||
Cash provided by operating activities | 4,733,741 | 1,883,186 | ||||||
Investing activities: | ||||||||
Capital expenditures | (968,795) | (702,378) | ||||||
Investment in and advances to affiliates | (227) | (169) | ||||||
Disposition of plant and equipment | 15,996 | 10,665 | ||||||
Acquisitions (net of cash acquired) | (3,465,866) | 300 | ||||||
Purchases of investments | (330,278) | (357,917) | ||||||
Proceeds from the sale of investments | 219,996 | 367,512 | ||||||
Other investing activities | (7,096) | 587 | ||||||
Cash used in investing activities | (4,536,270) | (681,400) | ||||||
Financing activities: | ||||||||
Net change in short-term debt | (7,214) | 42,780 | ||||||
Proceeds from issuance of long-term debt, net of discount | 2,091,934 | - | ||||||
Repayment of long-term debt | (506,000) | - | ||||||
Bond issuance costs | (13,138) | - | ||||||
Proceeds from exercise of stock options | 18,819 | 128,800 | ||||||
Payment of tax withholdings on certain stock-based compensation | (58,218) | (64,416) | ||||||
Distributions to noncontrolling interests | (268,535) | (97,196) | ||||||
Cash dividends | (272,038) | (246,539) | ||||||
Acquisition of treasury stock | (1,707,893) | (916,145) | ||||||
Proceeds from government incentives | 125,000 | - | ||||||
Other financing activities | (17,059) | (5,072) | ||||||
Cash used in financing activities | (614,342) | (1,157,788) | ||||||
Effect of exchange rate changes on cash | (817) | 8,079 | ||||||
(Decrease) increase in cash and cash equivalents and restricted cash and cash equivalents | (417,688) | 52,077 | ||||||
Cash and cash equivalents and restricted cash and cash equivalents - beginning of year | 2,508,658 | 2,754,929 | ||||||
Cash and cash equivalents and restricted cash and cash equivalents - end of six months | $ | 2,090,970 | $ | 2,807,006 | ||||
Non-cash investing activity: | ||||||||
Change in accrued plant and equipment purchases | $ | (23,583) | $ | 44,754 | ||||
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SOURCE Nucor Corporation
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