Nucor Corporation announced third quarter of 2018 consolidated net earnings of $676.7 million, or $2.13 per diluted share. Included in the third quarter of 2018 earnings is a non-cash impairment charge of $110.0 million, or $0.26 per diluted share, related to producing natural gas well assets.
This impairment charge was not included in their quantitative guidance range provided on September 14, 2018. By comparison, Nucor reported consolidated net earnings of $683.2 million, or $2.13 per diluted share, for the second quarter of 2018 and $254.9 million, or $0.79 per diluted share, for the third quarter of 2017.
In the first 9 months of 2018, Nucor reported consolidated net earnings of $1.71 billion, or $5.35 per diluted share, compared with consolidated net earnings of $934.8 million, or $2.90 per diluted share, in the first nine months of last year.
“The strong financial performance we have had this year continued into the third quarter, and we are on pace for 2018 to be a record year for earnings,” said John Ferriola, Nucor’s chairman, chief executive officer and president. “Our financial results are evidence that Nucor was primed and ready for this long-awaited upturn in the steel market. Our strategic initiatives, including capital projects, acquisitions and enhanced customer engagement, as well as our active participation in industry trade actions, have solidified our industry leading performance. Our extensive investments have grown our peak earnings power and enhanced our many competitive strengths.”
In the first 9 months of 2018, Nucor’s consolidated net sales increased 24 percent to $18.77 billion, compared with $15.16 billion in last year’s first 9 months. Total tons shipped to outside customers in the first nine months of 2018 were 21,212,000, an increase of 6 percent from the first 9 months of 2017, while average sales price per ton increased 16 percent.
The average scrap and scrap substitute cost per gross ton used during the third quarter of 2018 was $374, a slight increase compared to $373 in the second quarter of 2018 and an increase of 18 percent compared to $317 in the third quarter of 2017. The average scrap and scrap substitute cost per ton used in the first 9 months of 2018 was $361, an increase of 19 percent from $304 in the first 9 months of 2017.
The overall operating rate at their steel mills was 92 percent in the third quarter of 2018, which decreased compared to 95 percent in the second quarter of 2018 and increased compared to 84 percent in the third quarter of 2017. The operating rate for the first 9 months of 2018 increased to 93 percent as compared with 87 percent for the first nine months of 2017.
In September 2018, Nucor’s board of directors approved an investment of $650 million to expand the production capability of Nucor Steel Gallatin, the company’s flat-rolled sheet steel mill located in Ghent, Kentucky. This investment will increase the production capability from 1,600,000 tons to approximately 3,000,000 tons annually and will increase the maximum coil width to approximately 73”. This expansion complements the $176 million investment currently underway to construct a hot band continuous pickle galvanizing line at Nucor Steel Gallatin, which is expected to be operational in the first half of 2019 and will produce approximately 500,000 tons per year of galvanized hot band steel.
Also in September 2018, Nucor’s board of directors declared a cash dividend of $0.38 per share payable on November 9, 2018 to stockholders of record on September 28, 2018. This dividend is Nucor’s 182nd consecutive quarterly cash dividend, a record we expect to continue.
Additionally, in September 2018, the board of directors approved the repurchase of up to $2 billion of the Company’s common stock. Share repurchases will be made from time to time in the open market at prevailing market prices, through private transactions or block trades. The timing and amount of repurchases will depend on market conditions, share price, applicable legal requirements and other factors.
Published in the December 2018 Edition
