Nucor Corporation announced consolidated net earnings of $159.8M, or $0.50 per diluted share, for the first quarter of 2011, an increase of 416% over earnings of $31.0M, or $0.10 per diluted share, in the first quarter of 2010.
Nucor reported a net loss of $11.4M, or $0.04 per diluted share, in the fourth quarter of 2010.
Pre-operating and start-up costs of new facilities were $27.9M in Q1 compared with $50.5M in Q1 2010 and $39.0M in Q4 of 2010. In 2011, these costs related to several projects, the largest of which was the galvanizing line in Decatur, Alabama. The decrease in pre-operating and start-up costs was due to the improved performance at the special bar quality (SBQ) mill in Memphis, Tennessee and the wire rod products mill in Kingman, Arizona.
Nucor's consolidated net sales increased 32% to $4.83bn compared with $3.65bn in the Q1 of 2010 due to a 22% increase in average sales price per net ton and a 9% increase in total tons shipped to outside customers. Consolidated net sales increased 25% compared with $3.85bn in Q4 of 2010 due to a 12% increase in both total tons shipped to outside customers and in average sales price per ton.
The average scrap and scrap substitute cost per ton used during the Q1 of 2011 was $424, an increase of 33% compared to $318 in Q1 2010 and an increase of 18% over $359 in Q4 2010.
Overall operating rates at the steel mills increased to approximately 80% in Q1 2011, compared to 73% in Q1 2010 and 68% in Q4 2010. As a result of this increased utilization, total energy costs decreased approximately $1/ton from Q1 2010. Total energy costs per ton were unchanged from Q4 2010.
Nucor broke ground on a 2.5Mton DRI facility in Louisiana in March. In addition to a second DRI facility of the same size, future plans for the Louisiana site may include a coke plant, blast furnace, pellet plant and steel mill.
In February, Nucor's board declared a cash dividend of $0.3625 per share payable on May 11, 2011 to stockholders of record on March 31, 2011. This dividend is Nucor's 152nd consecutive quarter cash dividend, a record Nucor expect to continue.
Profitability improved significantly during Q1, as utilisation rates increased and as price increases for steel mill products caught up with higher raw material costs. Although there are now some signs of market weakness that may impact results near the end of Q2 it is expected that the Q” 2011 results will be a further improvement over Q1 as slow but steady improvement in real demand in certain end markets continues. This is most evident in products for the manufacturing/ industrial sector, including special bar quality products, sheet and plate.
Nucor is keeping a watchful eye on imports as any measurable increase in import levels will be a threat to current market stability, particularly in the sheet markets. The most challenging markets for Nucor’s products continue to be those associated with residential and non-residential construction.