Nucor Reports Results for Third Quarter of 2020

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Nucor Corporation (NYSE: NUE) reported third-quarter 2020 net earnings of $193.4 million ($0.63 per diluted share), a significant increase from $108.9 million ($0.36) in Q2 2020 but a decline from $275 million ($0.90) in Q3 2019. Year-to-date earnings totaled $322.6 million ($1.06 per diluted share), down from $1.16 billion ($3.78) last year. Consolidated net sales for Q3 were $4.93 billion, a 14% rise from Q2 but a 10% fall from Q3 2019. The company anticipates improved Q4 performance due to enhanced pricing in sheet and plate markets. Nucor declared a cash dividend of $0.4025 per share, payable on November 10, 2020.

Positive

• Q3 2020 net earnings increased to $193.4 million from $108.9 million in Q2 2020.
• Anticipated improved performance in Q4 2020 driven by positive pricing momentum.
• Declared a cash dividend of $0.4025 per share, reaffirming financial stability.

Negative

• Year-to-date earnings dropped to $322.6 million from $1.16 billion in 2019.
• Q3 net sales decreased 10% compared to Q3 2019.
• Average sales price per ton decreased 2% from Q2 2020 and 7% from Q3 2019.

CHARLOTTE, N.C., Oct. 22, 2020 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) today announced consolidated net earnings of $193.4 million, or $0.63 per diluted share, for the third quarter of 2020. By comparison, Nucor reported consolidated net earnings of $108.9 million, or $0.36 per diluted share, for the second quarter of 2020 and $275.0 million, or $0.90 per diluted share, for the third quarter of 2019.

In the first nine months of 2020, Nucor generated consolidated net earnings of $322.6 million, or $1.06 per diluted share, compared with consolidated net earnings of $1.16 billion, or $3.78 per diluted share, in the first nine months of 2019.

"I am incredibly proud of how our team has responded to the many challenges of 2020 beginning with the health, safety and well-being of our entire Nucor family.  Our third quarter results were better than we expected, reflecting continued strength in nonresidential construction. We expect improved performance in the fourth quarter due to positive pricing momentum in sheet and plate markets. Our teammates across the company continue to find unique ways to serve our customers while bringing innovative product solutions into the market," said Leon Topalian, Nucor's President and Chief Executive Officer.

Financial Strength
At the end of the third quarter of 2020, Nucor had $3.41 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.

Selected Segment Data
Earnings (loss) before income taxes and noncontrolling interests by segment for the third quarter and first nine months of 2020 and 2019 were as follows (in thousands):

		Three Months (13 Weeks) Ended								Nine Months (39 Weeks) Ended
		Oct. 3, 2020				Sept. 28, 2019				Oct. 3, 2020				Sept. 28, 2019
Steel mills		$	205,152			$	309,939			$	512,082			$	1,578,257
Steel products			186,976				170,214				502,409				363,731
Raw materials			6,232				(10,599)				(3,068)				64,333
Corporate/eliminations			(107,942)				(89,215)				(393,651)				(401,744)
		$	290,418			$	380,339			$	617,772			$	1,604,577

 

Financial Review
Included in earnings for the third quarter of 2020 was a restructuring charge of $16.4 million, or $0.04 per diluted share, related to the realignment of Nucor's metal buildings business. 

Nucor's consolidated net sales increased 14% to $4.93 billion in the third quarter of 2020 compared with $4.33 billion in the second quarter of 2020 and decreased 10% compared with $5.46 billion in the third quarter of 2019. Average sales price per ton in the third quarter of 2020 decreased 2% compared with the second quarter of 2020 and decreased 7% compared with the third quarter of 2019. A total of 6,367,000 tons was shipped to outside customers in the third quarter of 2020, a 16% increase from the second quarter of 2020 and a 3% decrease from the third quarter of 2019. Total steel mill shipments in the third quarter of 2020 increased 18% as compared to the second quarter of 2020 and decreased 3% as compared to the third quarter of 2019. Steel mill shipments to internal customers represented 21% of total steel mill shipments in each of the third quarter of 2020, the second quarter of 2020 and the third quarter of 2019. Downstream steel product shipments to outside customers in the third quarter of 2020 increased 14% from the second quarter of 2020 and remained flat compared to the third quarter of 2019.

In the first nine months of 2020, Nucor's consolidated net sales of $14.88 billion decreased 15% compared with consolidated net sales of $17.46 billion reported in the first nine months of 2019. Total tons shipped to outside customers in the first nine months of 2020 were 19,033,000, a decrease of 5% from the first nine months of 2019, while the average sales price per ton in the first nine months of 2020 decreased 10% from the first nine months of 2019.

The average scrap and scrap substitute cost per gross ton used in the third quarter of 2020 was $277, a 2% decrease compared to $284 in the second quarter of 2020 and a 7% decrease compared to $299 in the third quarter of 2019. The average scrap and scrap substitute cost per gross ton used in the first nine months of 2020 was $285, a 13% decrease compared to $328 in the first nine months of 2019.

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 third quarter of 2020, compared with approximately $22 million, or $0.06 per diluted share, in the second quarter of 2020 and approximately $28 million, or $0.07 per diluted share, in the third quarter of 2019.

In the first nine months of 2020, pre-operating and start-up costs related to the Company's growth projects were approximately $73 million, or $0.18 per diluted share, compared with approximately $68 million, or $0.17 per diluted share, in the first nine months of 2019.

Overall operating rates at the Company's steel mills increased to 83% in the third quarter of 2020 as compared to 68% in the second quarter of 2020 and were flat relative to the third quarter of 2019. Operating rates in the first nine months of 2020 decreased to 80% as compared to 85% in the first nine months of 2019.

Third Quarter of 2020 Analysis
Nonresidential construction market conditions remained strong throughout the quarter, while the automotive market's recovery accelerated. The results of the steel mills segment improved in the third quarter of 2020 as compared to the second quarter of 2020, led by Nucor's bar and structural mills. Market conditions for the Company's sheet and plate mills remained challenged. The Company's steel products segment had another strong quarter due to the continued resiliency of nonresidential construction markets, and, as expected, earnings for the third quarter of 2020 increased compared with the second quarter of 2020 for this segment. Third quarter of 2020 earnings in Nucor's raw materials segment increased as compared to the second quarter of 2020 due to improved pricing reflecting stronger steel demand.

Fourth Quarter of 2020 Outlook
The ongoing COVID-19 pandemic continues to cause uncertainty, making it difficult to accurately forecast future market conditions and demand trends. While many of the markets Nucor serves have typically experienced a seasonal slowdown in the fourth quarter, the Company expects higher earnings in the fourth quarter of 2020 as compared to the third quarter of 2020 due primarily to improved pricing at its sheet and plate mills. Nucor also expects the raw materials segment's earnings to increase in the fourth quarter of 2020 as compared to the third quarter of 2020 due to the improved margins at the Company's direct reduced iron facilities.

Cash Dividend
On September 10, 2020, Nucor's board of directors declared a cash dividend of $0.4025 per share. This cash dividend is payable on November 10, 2020 to stockholders of record as of September 30, 2020 and is Nucor's 190^th consecutive quarterly cash dividend.

Earnings Conference Call
You are invited to listen to the live broadcast of Nucor's conference call in which management will discuss Nucor's third quarter results on October 22, 2020 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," "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 steel prices and changes in the supply and cost of raw materials, including pig iron, iron ore and scrap steel; (4) 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, as well as prevailing domestic prices for oil and gas; (5) energy costs and availability; and (6) 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, 2019 and in "Item 1A. Risk Factors" of Nucor's Quarterly Report on Form 10-Q for the quarter ended July 4, 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						Nine Months (39 Weeks) Ended
		Oct. 3, 2020		Sept. 28, 2019		Percent Change		Oct. 3, 2020		Sept. 28, 2019		Percent Change
Steel mills total shipments:
Sheet		2,469		2,659		-7%		7,345		7,915		-7%
Bars		2,119		2,029		4%		6,092		6,050		1%
Structural		553		562		-2%		1,754		1,682		4%
Plate		424		470		-10%		1,472		1,605		-8%
Other		61		68		-10%		230		325		-29%
		5,626		5,788		-3%		16,893		17,577		-4%
Sales tons to outside customers:
Steel mills		4,442		4,559		-3%		13,382		14,013		-5%
Joist		153		133		15%		406		359		13%
Deck		129		132		-2%		365		354		3%
Cold finished		99		116		-15%		300		390		-23%
Fabricated concrete reinforcing steel		328		342		-4%		948		929		2%
Piling		186		160		16%		522		462		13%
Tubular products		280		272		3%		816		780		5%
Other steel products		92		107		-14%		278		303		-8%
Raw materials		658		734		-10%		2,016		2,456		-18%
		6,367		6,555		-3%		19,033		20,046		-5%

 

 

Condensed Consolidated Statements of Earnings (Unaudited)
(In thousands, except per share data)
		Three Months (13 Weeks) Ended								Nine Months (39 Weeks) Ended
		Oct. 3, 2020				Sept. 28, 2019				Oct. 3, 2020				Sept. 28, 2019
Net sales		$	4,927,960			$	5,464,502			$	14,879,603			$	17,457,112
Costs, expenses and other:
Cost of products sold			4,425,765				4,891,991				13,370,181				15,213,215
Marketing, administrative and other expenses			165,513				159,301				460,922				549,020
Equity in losses (earnings) of unconsolidated affiliates			(479)				1,585				14,422				(2,459)
Losses on assets			6,604				-				299,450				-
Interest expense, net			40,139				31,286				116,856				92,759
			4,637,542				5,084,163				14,261,831				15,852,535
Earnings before income taxes and noncontrolling interests			290,418				380,339				617,772				1,604,577
Provision for income taxes			67,788				86,752				207,610				367,920
Net earnings			222,630				293,587				410,162				1,236,657
Earnings attributable to noncontrolling interests			29,215				18,556				87,535				73,337
Net earnings attributable to Nucor stockholders		$	193,415			$	275,031			$	322,627			$	1,163,320
Net earnings per share:
Basic		$	0.63			$	0.90			$	1.06			$	3.79
Diluted		$	0.63			$	0.90			$	1.06			$	3.78
Average shares outstanding:
Basic			303,394				304,637				303,072				305,553
Diluted			303,441				304,980				303,099				306,029

 

 

Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
		Oct. 3, 2020				Dec. 31, 2019
ASSETS
Current assets:
Cash and cash equivalents		$	2,866,578			$	1,534,605
Short-term investments			412,401				300,040
Accounts receivable, net			2,119,421				2,160,102
Inventories, net			3,260,685				3,842,095
Other current assets			306,762				389,528
Total current assets			8,965,847				8,226,370
Property, plant and equipment, net			6,829,733				6,178,555
Restricted cash and cash equivalents			131,623				-
Goodwill			2,195,788				2,201,063
Other intangible assets, net			678,558				742,186
Other assets			717,728				996,492
Total assets		$	19,519,277			$	18,344,666
LIABILITIES
Current liabilities:
Short-term debt		$	63,778			$	62,444
Current portion of long-term debt and finance lease obligations			10,475				29,264
Accounts payable			1,210,987				1,201,698
Salaries, wages and related accruals			432,767				510,844
Accrued expenses and other current liabilities			655,288				659,524
Total current liabilities			2,373,295				2,463,774
Long-term debt and finance lease obligations due after one year			5,452,193				4,291,301
Deferred credits and other liabilities			976,722				798,415
Total liabilities			8,802,210				7,553,490
EQUITY
Nucor stockholders' equity:
Common stock			152,061				152,061
Additional paid-in capital			2,117,582				2,107,646
Retained earnings			11,068,908				11,115,056
Accumulated other comprehensive loss,     net of income taxes			(315,469)				(302,966)
Treasury stock			(2,720,668)				(2,713,931)
Total Nucor stockholders' equity			10,302,414				10,357,866
Noncontrolling interests			414,653				433,310
Total equity			10,717,067				10,791,176
Total liabilities and equity		$	19,519,277			$	18,344,666

 

Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
		Nine Months (39 Weeks) Ended
		Oct. 3, 2020				Sept. 28, 2019
Operating activities:
Net earnings		$	410,162			$	1,236,657
Adjustments:
Depreciation			525,688				477,957
Amortization			62,877				64,655
Stock-based compensation			56,122				74,311
Deferred income taxes			140,606				76,737
Distributions from affiliates			3,021				27,405
Equity in losses (earnings) of unconsolidated affiliates			14,422				(2,459)
Losses on assets			299,450				-
Changes in assets and liabilities (exclusive of acquisitions and dispositions):
Accounts receivable			37,547				197,783
Inventories			590,434				476,761
Accounts payable			15,366				(180,397)
Federal income taxes			18,848				(177,405)
Salaries, wages and related accruals			(69,235)				(157,317)
Other operating activities			100,283				5,526
Cash provided by operating activities			2,205,591				2,120,214
Investing activities:
Capital expenditures			(1,179,081)				(984,646)
Investment in and advances to affiliates			(16,542)				(27,613)
Divestiture of affiliates			-				67,591
Disposition of plant and equipment			19,492				32,922
Acquisitions (net of cash acquired)			(20,368)				(9,495)
Purchase of investments			(401,986)				(249,616)
Proceeds from the sale of investments			301,249				-
Other investing activities			(33,536)				2,176
Cash used in investing activities			(1,330,772)				(1,168,681)
Financing activities:
Net change in short-term debt			1,334				(10,145)
Proceeds from long-term debt, net of discount			1,237,635				-
Repayment of long-term debt			(97,150)				-
Bond issuance related costs			(6,250)				-
Issuance of common stock			-				5,892
Payment of tax withholdings on certain stock-based compensation			(17,691)				(15,723)
Distributions to noncontrolling interests			(106,193)				(71,241)
Cash dividends			(368,636)				(369,270)
Acquisition of treasury stock			(39,499)				(197,511)
Other financing activities			(6,983)				(6,538)
Cash provided by (used in) financing activities			596,567				(664,536)
Effect of exchange rate changes on cash			(7,790)				482
Increase in cash and cash equivalents			1,463,596				287,479
Cash and cash equivalents - beginning of year			1,534,605				1,398,886
Cash and cash equivalents  and restricted cash and cash equivalents- end of nine months		$	2,998,201			$	1,686,365
Non-cash investing activity:
Change in accrued plant and equipment purchases		$	-			$	62,700

 

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SOURCE Nucor Corporation

FAQ

What were Nucor's earnings for Q3 2020?

Nucor reported net earnings of $193.4 million, or $0.63 per diluted share, for Q3 2020.

How do Nucor's Q3 2020 earnings compare to Q2 2020?

Earnings in Q3 2020 rose from $108.9 million in Q2 2020.

What is Nucor's outlook for Q4 2020?

Nucor expects improved performance in Q4 2020, attributed to positive pricing in sheet and plate markets.

What was Nucor's consolidated net sales in Q3 2020?

Nucor's consolidated net sales in Q3 2020 were $4.93 billion.

When is Nucor's cash dividend payable?

The cash dividend of $0.4025 per share is payable on November 10, 2020.