Oct. 26, 2016

Earnings Jump at Nucor

Nucor Corp., Charlotte, N.C., reported net earnings of $270 million in its third quarter, an increase of 18.9 percent over the same quarter of 2015 and a similar increase over the second quarter. Through three quarters, Nucor’s earnings of $547.6 million were up 36.9 percent on 2015.

Third-quarter net sales for the minimill steelmaker totaled $4.29 billion, a 1.5 percent increase from the same quarter in 2015 and up 1.0 percent from the prior quarter. For the year to date, Nucor’s net sales of $12.3 billion were down 5.6 percent compared with 2015.

The company’s average sales price per ton increased 11 percent from the second quarter and 2 percent from the third quarter of 2015. Shipments to outside customers declined 9 percent to 5.9 million tons in the quarter compared with the prior quarter, but were flat with the same period last year.

Overall operating rates at the company’s steel mills decreased to 71 percent in the third quarter from 83 percent in the second quarter, but were up from 69 percent a year ago. Mill operating rates for the first nine months averaged 76 percent, up from 69 percent in 2015.

“The improvement in earnings in the third quarter is primarily due to the performance of our steel mills and raw materials segments. The profitability of our sheet mills improved due to higher average selling prices, which benefited in part from contract sales that are priced on a lagging quarterly basis,” said Nucor Chairman and CEO John Ferriola. “Demand for cold-rolled and galvanized sheet products remained robust, while demand for hot-rolled sheet products has weakened since the first half of the year.”

Ferriola said the trade cases on flat-rolled products are having a positive effect on steel import levels, with overseas offerings declining 20 percent. Nucor filed a new trade case in September on rebar imports from Turkey, and is awaiting a ruling on a plate case it filed earlier in 2016.

Also during the quarter, Nucor announced plans to acquire Independence Tube Corp., a manufacturer of hollow structural section steel tubing, for $435 million. ITC operates four facilities in Illinois and Alabama, producing an estimated 600,000 tons annually.

Nucor also announced plans to add a specialty cold mill complex at its Nucor Steel Arkansas division. The Specialty Cold Mill Complex will expand Nucor's capability to produce advanced high-strength, motor lamination, and high-strength low-alloy steel products.


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Sunday, October 22, 2017