Nucor Corporation (NYSE: NUE) reports consolidated net earnings of $84.8M, or $0.26 per diluted share, for Q1 of 2013, down 41.5% on the same period 2012 when net earnings reached $145.1M, or $0.46 per diluted share. The result was also down 38% of the net earnings of $136.9M, or $0.43 per diluted share, in Q4 2012.
Consolidated net sales decreased 10% to $4.55bn in Q1 2013 from $5.07bn in Q1 2012 but increased 2% compared with $4.45bn in Q4 2012. The average sales price per US short ton decreased 7% from Q1 2012 and decreased 2% from Q4 2012. Total tons shipped to outside customers were 5.706Mstons in Q1 2013, a 4% decrease from Q1 2012 but a 4% increase over Q4 2012.
The average furnace charge costs of scrap and scrap substitute in Q1 2013 was $379, a decrease of 15% from $445 in Q1 2012 but an increase of 2% compared to $372 in Q4 2012.
Overall utilisation rates of the Nucor steel mills decreased to 72% in Q1 2013 compared to 79% in Q1 2012, but increased from 71% in Q4 of 2012.
Total energy costs in Q1 2013 increased approximately $1 per ton compared to Q1 2012 attributable mainly to the increased cost of electricity due to lower production volumes of steel increasing unit costs. But, other energy costs decreased approximately $1 per ton compared with Q4 2012 due mainly to lower natural gas prices.
Construction is progressing on Nucor’s 2.5Mston DRI facility in Louisiana but extreme weather conditions during Q1 have delayed expected start-up to Q3 2013.
The Company’s liquidity position remains strong with $1.08bn in cash and cash equivalents, short-term investments, and restricted cash and investments, and an untapped $1.5bn revolving credit facility that matures in December 2016.
In February, Nucor's board declared a cash dividend of $0.3675 per share payable on May 10, 2013 to stockholders of record on March 28, 2013. This dividend is Nucor's 160th consecutive quarterly cash dividend, a record they expect to continue.
Overall, Nucor’s steel mills have not experienced the seasonal improvement in volume and pricing that is typical in the first quarter of the year. As expected, the downstream steel products segment experienced a seasonal slowdown in Q1, and that segment reported a modest loss following three straight quarters of profitable operating performance. The raw materials segment also reported weaker results due to an unplanned 18 day outage at the Trinidad DRI facility and weather-related effects negatively impacting the flow of scrap in Nucor’s scrap processing business.
Nucor expect to see some improvement in earnings in Q2 2013 driven by better performance at its fabricated construction products businesses (rebar fabrication, joist and decking and pre-engineered metal buildings) as well as the raw materials businesses and most steel mill product groups, but partially offset by weaker performance in sheet steel.
Import levels and general economic and political uncertainty continue to negatively affect the steel business.
The Company continues to be cautiously optimistic about the non-residential construction markets in 2013 as they continue to improve slowly from historically low levels. The strongest end markets continue to be in manufactured goods including energy and automotive.
Source: Nucor Corp