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Nucor announces Q3 and 9 months of 2017

Steel News - Published on Mon, 23 Oct 2017

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Nucor Corporation announced consolidated net earnings of USD 268.5 million, or USD 0.83 per diluted share, for the third quarter of 2017. By comparison, Nucor reported consolidated net earnings of USD 323.0 million, or USD 1.00 per diluted share, for the second quarter of 2017 and consolidated net earnings of USD 305.4 million, or USD 0.95 per diluted share, for the third quarter of 2016.

For the first nine months of 2017, Nucor reported consolidated net earnings of USD 948.4 million, or USD 2.94 per diluted share, compared with consolidated net earnings of USD 636.6 million, or USD 1.99 per diluted share, for the first nine months of last year. Consolidated net earnings of USD 2.94 per diluted share for the first nine months of 2017 exceeds the reported annual diluted earnings per share for each of the previous eight years.

Earnings (loss) before income taxes and noncontrolling interests by segment were as follows for the third quarter and first nine months of 2017 and 2016 (in thousands)

Earnings in the third quarter of 2017 include a net benefit totaling USD 13.2 million, or USD 0.04 per diluted share, related to tax return true-ups and state tax credits. Included in the third quarter of 2016 results were charges related to legal settlements of USD 33.7 million (USD 0.06 per diluted share) and a net benefit of USD 11.1 million (USD 0.02 per diluted share) related to fair value adjustments to assets in the corporate/eliminations segment.

Nucor's consolidated net sales of USD 5.17 billion in the third quarter of 2017 was consistent with USD 5.17 billion in the second quarter of 2017 and increased 21% compared with USD 4.29 billion in the third quarter of 2016. Average sales price per ton in the third quarter of 2017 increased 2% from the second quarter of 2017 and increased 7% from the third quarter of 2016. Total tons shipped to outside customers were 6,618,000 tons in the third quarter of 2017, a 2% decrease from the second quarter of 2017 and a 12% increase from the third quarter of 2016. Total third quarter steel mill shipments decreased 3% from the second quarter of 2017 and increased 18% from the third quarter of 2016. Third quarter of 2017 downstream steel products shipments to outside customers increased 10% from the second quarter of 2017 and increased 3% from the third quarter of 2016.
In the first nine months of 2017, Nucor's consolidated net sales increased 24% to USD 15.16 billion, compared with USD 12.25 billion in last year's first nine months, and total tons shipped to outside customers increased 8% from the first nine months of 2016, while average sales price per ton increased 15%.

The average scrap and scrap substitute cost per ton used during the third quarter of 2017 was USD 317, an increase of 1% from USD 313 in the second quarter of 2017 and an increase of 26% compared with USD 252 in the third quarter of 2016. The average scrap and scrap substitute cost per ton used in the first nine months of 2017 was USD 304, an increase of 35% from USD 225 in the first nine months of 2016.

Overall operating rates at our steel mills decreased to 83% in the third quarter of 2017 as compared to 88% in the second quarter of 2017 and increased from 74% in the third quarter of 2016. Operating rates for the first nine months of 2017 increased to 86% as compared with 80% for the first nine months of 2016.

Total steel mill energy costs for the third quarter of 2017 increased approximately USD 2 per ton and USD 1 per ton compared to the second quarter of 2017 and the third quarter of 2016, respectively. The increase from the second quarter of 2017 was due to reduced steel production volumes and increased electricity unit costs and the increase from the third quarter of 2016 was primarily due to higher electricity unit costs. Total steel mill energy costs for the first nine months of 2017 also increased USD 2 per ton compared to the first nine months of 2016 primarily due to higher electricity and natural gas unit costs.

Our liquidity position remains strong with USD 1.6 billion in cash and cash equivalents and short-term investments, as of September 30, 2017, and an untapped USD 1.5 billion revolving credit facility that does not expire until April 2021. During the third quarter of 2017, we repurchased approximately 1.6 million shares of the Company's common stock for an average share price of USD 56.76.

Nucor completed its acquisition of St. Louis Cold Drawn, Inc. on September 1, 2017. St. Louis Cold Drawn, Inc. is a manufacturer of cold drawn rounds, hexagons, squares and special sections that mainly serves the U.S. and Mexican automotive and industrial markets. St. Louis Cold Drawn, Inc. employs 125 people and has two manufacturing locations, one in St. Louis, Missouri, and the other in Monterrey, Mexico, that have a combined annual capacity of 200,000 tons. The addition of these facilities increased the total capacity of Nucor's cold finished bar and wire facilities to more than 1.1 million tons annually and helps advance our goal of growing our sales to automotive customers.

In September, Nucor's board of directors declared a cash dividend of USD 0.3775 per share payable on November 9, 2017 to stockholders of record on September 29, 2017. This dividend is Nucor's 178th consecutive quarterly cash dividend, a record we expect to continue.

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Posted By : Nanda Koijam on Mon, 23 Oct 2017
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