Nucor Reports Results for the Second Quarter of 2023
- Nucor Corporation reports earnings per diluted share of $5.81 for Q2 2023, a 30% increase compared to Q1 2023 and a 40% increase compared to Q2 2022.
- Net sales for Q2 2023 increased by 9% compared to Q1 2023.
- Nucor returned $580 million to stockholders through share repurchases and dividends in Q2 2023.
- Nucor's consolidated net sales decreased by 19% compared to Q2 2022.
- Earnings in the third quarter of 2023 are expected to decrease compared to Q2 2023.
- Earnings for the steel mills segment are expected to decline in Q3 2023 due to decreased profitability.
Second Quarter of 2023 Highlights
$5.81 $10.26 - Net sales of
$9.52 billion 9% increase over first quarter net sales - Net earnings attributable to Nucor stockholders of
$1.46 billion $2.21 billion - Returned
$580 million
In the first six months of 2023, Nucor reported consolidated net earnings attributable to Nucor stockholders of
"The investments we've made in recent years to grow our core and expand into new markets are generating strong returns for stockholders and further position Nucor as a highly efficient industrial manufacturer," said Leon Topalian, Nucor's Chair, President and Chief Executive Officer.
"Through June, we are on pace to set another safety record for the fifth consecutive year. And with
Selected Segment Data
Earnings (loss) before income taxes and noncontrolling interests by segment for the second quarter and first six months of 2023 and 2022 were as follows (in thousands):
Three Months (13 Weeks) Ended | Six Months (26 Weeks) Ended | |||||||||||||||
July 1, 2023 | July 2, 2022 | July 1, 2023 | July 2, 2022 | |||||||||||||
Steel mills | $ | 1,403,547 | $ | 2,815,723 | $ | 2,241,935 | $ | 5,394,577 | ||||||||
Steel products | 1,010,789 | 1,129,932 | 1,981,591 | 1,814,799 | ||||||||||||
Raw materials | 138,411 | 263,598 | 196,551 | 359,451 | ||||||||||||
Corporate/eliminations | (502,965) | (718,851) | (773,511) | (1,180,310) | ||||||||||||
$ | 2,049,782 | $ | 3,490,402 | $ | 3,646,566 | $ | 6,388,517 | |||||||||
Financial Review
Nucor's consolidated net sales increased
In the first six months of 2023, Nucor's consolidated net sales of
The average scrap and scrap substitute cost per gross ton used in the second quarter of 2023 was
Pre-operating and start-up costs related to the Company's growth projects were approximately
In the first six months of 2023, 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 2023, we had
Commitment to Returning Capital to Stockholders
During the second quarter of 2023, Nucor repurchased approximately 3.1 million shares of its common stock at an average price of
On June 8, 2023, Nucor's board of directors declared a cash dividend of
Second Quarter of 2023 Analysis
The steel mills segment's earnings improved in the second quarter of 2023 as compared to the first quarter of 2023 primarily due to margin expansion at our sheet mills. Earnings in the steel products segment increased in the second quarter of 2023 as compared to the first quarter of 2023 due to increased volumes. The raw materials segment earnings improved in the second quarter of 2023 as compared to the first quarter of 2023 due to the improved profitability of our direct reduced iron ("DRI") facilities.
Third Quarter of 2023 Outlook
We expect earnings in the third quarter of 2023 to decrease compared to the second quarter of 2023. We expect earnings for the steel mills segment to decline in the third quarter of 2023 as compared to the second quarter of 2023 due to decreased profitability, with the largest impact at our sheet mills. The earnings of the steel products segment are expected to moderate in the third quarter of 2023 as compared to the second quarter of 2023. Earnings for the raw materials segment are expected to decrease in the third quarter of 2023 as compared to the second quarter of 2023 due to margin compression at our DRI facilities and scrap processing operations.
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 25, 2023 at 10:00 a.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
Non-GAAP Financial Measures
The Company uses certain non-GAAP (Generally Accepted Accounting Principles) financial measures in this news release, including EBITDA. Generally, a non-GAAP financial measure is a numerical measure of a company's performance or financial position that either excludes or includes amounts that are not normally excluded or included in the most directly comparable financial measure calculated and presented in accordance with GAAP.
Beginning with the second quarter of 2023, we define EBITDA as net earnings attributable to Nucor stockholders, adding back the following items: interest expense, net; provision for income taxes; depreciation; and amortization. The Company believes that this revised definition of EBITDA is a more relevant supplemental measure of performance. First quarter of 2023 EBITDA was
Management presents the non-GAAP financial measure of EBITDA in this news release because it considers it to be an important supplemental measure of performance. Management believes that this non-GAAP financial measure provides additional insight for analysts and investors evaluating the Company's financial and operational performance by providing a consistent basis of comparison across periods.
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)
Tonnage Data | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Three Months (13 Weeks) Ended | Six Months (26 Weeks) Ended | |||||||||||||||||||||||
July 1, 2023 | July 2, 2022 | Percent | July 1, 2023 | July 2, 2022 | Percent | |||||||||||||||||||
Steel mills total shipments: | ||||||||||||||||||||||||
Sheet | 2,786 | 2,934 | -5 | % | 5,605 | 5,319 | 5 | % | ||||||||||||||||
Bars | 2,122 | 2,273 | -7 | % | 4,291 | 4,559 | -6 | % | ||||||||||||||||
Structural | 505 | 624 | -19 | % | 1,041 | 1,264 | -18 | % | ||||||||||||||||
Plate | 520 | 474 | 10 | % | 974 | 872 | 12 | % | ||||||||||||||||
Other | 46 | 143 | -68 | % | 103 | 248 | -58 | % | ||||||||||||||||
5,979 | 6,448 | -7 | % | 12,014 | 12,262 | -2 | % | |||||||||||||||||
Sales tons to outside customers: | ||||||||||||||||||||||||
Steel mills | 4,774 | 5,041 | -5 | % | 9,578 | 9,580 | - | |||||||||||||||||
Joist | 142 | 158 | -10 | % | 277 | 337 | -18 | % | ||||||||||||||||
Deck | 107 | 123 | -13 | % | 206 | 259 | -20 | % | ||||||||||||||||
Cold finished | 112 | 123 | -9 | % | 229 | 256 | -11 | % | ||||||||||||||||
Rebar fabrication products | 332 | 339 | -2 | % | 611 | 630 | -3 | % | ||||||||||||||||
Piling | 113 | 119 | -5 | % | 214 | 230 | -7 | % | ||||||||||||||||
Tubular products | 239 | 274 | -13 | % | 514 | 504 | 2 | % | ||||||||||||||||
Other steel products | 148 | 175 | -15 | % | 283 | 330 | -14 | % | ||||||||||||||||
Raw materials | 621 | 625 | -1 | % | 1,119 | 1,245 | -10 | % | ||||||||||||||||
6,588 | 6,977 | -6 | % | 13,031 | 13,371 | -3 | % | |||||||||||||||||
Condensed Consolidated Statements of Earnings (Unaudited) (In thousands, except per share data) | ||||||||||||||||
Three Months (13 Weeks) Ended | Six Months (26 Weeks) Ended | |||||||||||||||
July 1, 2023 | July 2, 2022 | July 1, 2023 | July 2, 2022 | |||||||||||||
Net sales | $ | 9,523,256 | $ | 11,794,474 | $ | 18,233,236 | $ | 22,287,756 | ||||||||
Costs, expenses and other: | ||||||||||||||||
Cost of products sold | 7,021,582 | 7,690,211 | 13,733,360 | 14,725,354 | ||||||||||||
Marketing, administrative and other expenses | 453,388 | 563,211 | 843,283 | 1,087,795 | ||||||||||||
Equity in earnings of unconsolidated affiliates | (6,094) | (7,113) | (4,754) | (14,808) | ||||||||||||
Interest expense, net | 4,598 | 57,763 | 14,781 | 100,898 | ||||||||||||
7,473,474 | 8,304,072 | 14,586,670 | 15,899,239 | |||||||||||||
Earnings before income taxes and noncontrolling interests | 2,049,782 | 3,490,402 | 3,646,566 | 6,388,517 | ||||||||||||
Provision for income taxes | 462,707 | 763,165 | 827,862 | 1,434,165 | ||||||||||||
Net earnings before noncontrolling interests | 1,587,075 | 2,727,237 | 2,818,704 | 4,954,352 | ||||||||||||
Earnings attributable to noncontrolling interests | 125,721 | 166,004 | 220,808 | 297,496 | ||||||||||||
Net earnings attributable to Nucor stockholders | $ | 1,461,354 | $ | 2,561,233 | $ | 2,597,896 | $ | 4,656,856 | ||||||||
Net earnings per share: | ||||||||||||||||
Basic | $ | 5.82 | $ | 9.69 | $ | 10.28 | $ | 17.34 | ||||||||
Diluted | $ | 5.81 | $ | 9.67 | $ | 10.26 | $ | 17.30 | ||||||||
Average shares outstanding: | ||||||||||||||||
Basic | 250,144 | 263,221 | 251,876 | 267,416 | ||||||||||||
Diluted | 250,524 | 263,719 | 252,334 | 268,066 | ||||||||||||
Condensed Consolidated Balance Sheets (Unaudited) (In thousands) | ||||||||
July 1, 2023 | Dec. 31, 2022 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 4,510,563 | $ | 4,280,852 | ||||
Short-term investments | 870,475 | 576,946 | ||||||
Accounts receivable, net | 3,874,933 | 3,591,030 | ||||||
Inventories, net | 5,632,324 | 5,453,531 | ||||||
Other current assets | 402,213 | 789,325 | ||||||
Total current assets | 15,290,508 | 14,691,684 | ||||||
Property, plant and equipment, net | 10,093,399 | 9,616,920 | ||||||
Restricted cash and cash equivalents | 12,665 | 80,368 | ||||||
Goodwill | 3,926,197 | 3,920,060 | ||||||
Other intangible assets, net | 3,205,881 | 3,322,265 | ||||||
Other assets | 851,266 | 847,913 | ||||||
Total assets | $ | 33,379,916 | $ | 32,479,210 | ||||
LIABILITIES | ||||||||
Current liabilities: | ||||||||
Short-term debt | $ | 33,339 | $ | 49,081 | ||||
Current portion of long-term debt and finance lease obligations | 25,087 | 28,582 | ||||||
Accounts payable | 1,855,502 | 1,649,523 | ||||||
Salaries, wages and related accruals | 1,043,967 | 1,654,210 | ||||||
Accrued expenses and other current liabilities | 1,046,279 | 948,348 | ||||||
Total current liabilities | 4,004,174 | 4,329,744 | ||||||
Long-term debt and finance lease obligations due after one year | 6,620,686 | 6,613,687 | ||||||
Deferred credits and other liabilities | 1,814,128 | 1,965,873 | ||||||
Total liabilities | 12,438,988 | 12,909,304 | ||||||
Commitments and contingencies | ||||||||
EQUITY | ||||||||
Nucor stockholders' equity: | ||||||||
Common stock | 152,061 | 152,061 | ||||||
Additional paid-in capital | 2,149,693 | 2,143,520 | ||||||
Retained earnings | 27,095,661 | 24,754,873 | ||||||
Accumulated other comprehensive loss, net of income taxes | (128,972) | (137,517) | ||||||
Treasury stock | (9,314,764) | (8,498,243) | ||||||
Total Nucor stockholders' equity | 19,953,679 | 18,414,694 | ||||||
Noncontrolling interests | 987,249 | 1,155,212 | ||||||
Total equity | 20,940,928 | 19,569,906 | ||||||
Total liabilities and equity | $ | 33,379,916 | $ | 32,479,210 | ||||
Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) | ||||||||
Six Months (26 Weeks) Ended | ||||||||
July 1, 2023 | July 2, 2022 | |||||||
Operating activities: | ||||||||
Net earnings before noncontrolling interests | $ | 2,818,704 | $ | 4,954,352 | ||||
Adjustments: | ||||||||
Depreciation | 448,836 | 397,270 | ||||||
Amortization | 117,231 | 87,267 | ||||||
Stock-based compensation | 83,587 | 74,219 | ||||||
Deferred income taxes | (44,609) | (36,220) | ||||||
Distributions from affiliates | 18,621 | 2,287 | ||||||
Equity in earnings of unconsolidated affiliates | (4,754) | (14,808) | ||||||
Changes in assets and liabilities (exclusive of acquisitions and dispositions): | ||||||||
Accounts receivable | (270,314) | (648,569) | ||||||
Inventories | (174,437) | (157,976) | ||||||
Accounts payable | 242,071 | 198,062 | ||||||
Federal income taxes | 396,341 | 33,441 | ||||||
Salaries, wages and related accruals | (573,993) | (252,758) | ||||||
Other operating activities | 70,313 | 97,174 | ||||||
Cash provided by operating activities | 3,127,597 | 4,733,741 | ||||||
Investing activities: | ||||||||
Capital expenditures | (1,057,086) | (968,795) | ||||||
Investment in and advances to affiliates | (35,078) | (227) | ||||||
Disposition of plant and equipment | 5,289 | 15,996 | ||||||
Acquisitions (net of cash acquired) | - | (3,465,866) | ||||||
Purchases of investments | (701,639) | (330,278) | ||||||
Proceeds from the sale of investments | 408,854 | 219,996 | ||||||
Other investing activities | - | (7,096) | ||||||
Cash used in investing activities | (1,379,660) | (4,536,270) | ||||||
Financing activities: | ||||||||
Net change in short-term debt | (15,742) | (7,214) | ||||||
Proceeds from issuance of long-term debt, net of discount | - | 2,091,934 | ||||||
Repayment of long-term debt | (5,000) | (506,000) | ||||||
Bond issuance costs | - | (13,138) | ||||||
Proceeds from exercise of stock options | 7,123 | 18,819 | ||||||
Payment of tax withholdings on certain stock-based compensation | (42,120) | (58,218) | ||||||
Distributions to noncontrolling interests | (388,771) | (268,535) | ||||||
Cash dividends | (259,894) | (272,038) | ||||||
Acquisition of treasury stock | (876,698) | (1,707,893) | ||||||
Proceeds from government incentives | - | 125,000 | ||||||
Other financing activities | (8,296) | (17,059) | ||||||
Cash used in financing activities | (1,589,398) | (614,342) | ||||||
Effect of exchange rate changes on cash | 3,469 | (817) | ||||||
Increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents | 162,008 | (417,688) | ||||||
Cash and cash equivalents and restricted cash and cash equivalents - beginning of year | 4,361,220 | 2,508,658 | ||||||
Cash and cash equivalents and restricted cash and cash equivalents - end of six months | $ | 4,523,228 | $ | 2,090,970 | ||||
Non-cash investing activity: | ||||||||
Change in accrued plant and equipment purchases | $ | (36,580) | $ | (23,583) | ||||
Non-GAAP Financial Measures | ||||
Reconciliation of EBITDA (Unaudited) | ||||
(In thousands) | ||||
Three months ended (13 weeks) | ||||
July 1, 2023 | ||||
Net earnings attributable to Nucor stockholders | $ | 1,461,354 | ||
Depreciation | 227,747 | |||
Amortization | 58,462 | |||
Interest expense, net | 4,598 | |||
Provision for income taxes | 462,707 | |||
EBITDA | $ | 2,214,868 | ||
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SOURCE Nucor Corporation
FAQ
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