Oct. 29, 2014
Nucor's 3Q Earnings Increase 66 Percent
Nucor Corp., Charlotte, reported net earnings of $245.4 million during the third quarter, a 66.3 percent improvement on the same quarter last year. For the first nine months of 2014, Nucor reported net earnings of $503.5 million, 58.6 percent better than 2013.
Nucor's net sales increased 15 percent to $5.7 billion in the third quarter compared to the prior-year quarter, and were up 8 percent compared to the previous quarter. Net sales through three quarters totaled $16.1 billion, up 14 percent from 2013.
Shipments to outside customers totaled 6.8 million tons in the third quarter, a 6 percent increase over the second quarter and up 10 percent over third-quarter 2013. For the nine-month period, total tons shipped increased 9 percent, while the average sales price was up 4 percent.
Operating rates at Nucor's steel mills increased to 81 percent in the third quarter from 79 percent in the prior quarter. That compares to an average of 74 percent in the first nine months of 2013.
"Overall operating performance at our steel mills segment for the third quarter was much improved compared to the second quarter of 2014 due to increased profitability in sheet, structural, bar and plate steel. The strongest markets for the steel mills continue to be manufactured goods, including energy and automotive. Though third quarter results are much improved from the second quarter, imports remain at high levels, applying downward pressure on pricing," said John Ferriola, Nucor chairman, president and CEO.
Ferriola pointed to signs of life in the nonresidential construction segment, a major end market for Nucor. "We think by the end of this year, compared to last year, you will see somewhere around a 7-8 percent improvement in nonresidential construction based on square footage. And we anticipate the same growth next year, or maybe a little bit better," he said.
During the quarter, Nucor made a substantial acquisition, purchasing Gallatin Steel, a minimill with 1.8 million tons of capacity located on the Ohio River in Ghent, Ky. Nucor executives view the investment as an opportunity for both immediate and long-range dividends, though the company is still weighing its options.
"We might put further processing in the plant or around the plant. Some of our other sheet mills have expanded into higher-value products such as automotive, appliance, or lawn and garden, so there is absolutely no reason we cannot transfer that knowledge to the Gallatin mill," Ferriola said.
Also during the quarter, Nucor Steel Berkeley started up its $95 million wide light capital project, which allows the company to produce sheet as thin as 0.042 inch up to 72 inches wide, the lightest hot-rolled gauge capability of any sheet mill in the southern U.S., the company claims.