Nucor's Earnings Dip in Second Quarter
By
Metal Center News Staff on
Jul 22, 2019
Nucor Corp., Charlotte, reported net earnings of $386.5 million in the second quarter, a decline of 43.4 percent from the same quarter last year, and down 23 percent compared with the first quarter. First-half net earnings of $888.3 million were 14.6 percent below 2018.
"Unusually wet weather and aggressive supply chain destocking impacted mill order rates in the first half of 2019. We have seen lower volumes during the first half of this year resulting in a more challenging price environment," said John Ferriola, Nucor's chairman, CEO and president.
Nucor's consolidated net sales decreased 3 percent to $5.9 billion in the second quarter, and wwere down 9 percent compared with the second quarter of 2018. Average sales price per ton in the second quarter decreased 3 percent compared with the first quarter and 2 percent compared with the second quarter of 2018.
A total of 6,724,000 tons were shipped to outside customers in the second quarter, a 1 percent decrease from first quarter of 2019 and a 7 percent decrease from the second quarter of 2018. Total steel mill shipments in the second quarter of 2019 decreased 3 percent from the first quarter of 2019 and decreased 10 percent from the second quarter of 2018.
“Real demand for our products remains strong in key end-use markets. We see healthy conditions in end-use markets that typically account for more than two thirds of our steel shipments. For this reason, we are cautiously optimistic that pricing has bottomed for most products and that volumes should be more closely aligned with real end-use demand in the second half of the year," Ferriola said.
Overall operating rates at the company's steel mills decreased to 84 percent in the second quarter from 87 percent in the first quarter of 2019. Operating rates during second-quarter 2018 were at 95 percent.
Nucor executives expect the performance of the steel mills segment in the third quarter to be lower than this year's second quarter, due primarily to lower prices for flat-rolled and plate steel. Prices for several key product lines have only recently reversed the downward trajectory that prevailed during the first half of the year due to weather conditions and service center destocking. Nucor expects service center customers will resume more normal market demand-driven buying patterns during the third quarter.