Nucor Corporation announced consolidated net earnings of $268.5 million, or $0.83 per diluted share, for the third quarter of 2017. By comparison, Nucor reported consolidated net earnings of $323.0 million, or $1.00 per diluted share, for the second quarter of 2017 and consolidated net earnings of $305.4 million, or $0.95 per diluted share, for the third quarter of 2016.
For the first 9 months of 2017, Nucor reported consolidated net earnings of $948.4 million, or $2.94 per diluted share, compared with consolidated net earnings of $636.6 million, or $1.99 per diluted share, for the first 9 months of last year. Consolidated net earnings of $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 in the third quarter of 2017 include a net benefit totaling $13.2 million, or $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 $33.7 million ($0.06 per diluted share) and a net benefit of $11.1 million ($0.02 per diluted share) related to fair value adjustments to assets in the corporate/eliminations segment.
Nucor’s consolidated net sales of $5.17 billion in the third quarter of 2017 was consistent with $5.17 billion in the second quarter of 2017 and increased 21 percent compared with $4.29 billion in the third quarter of 2016. Average sales price per ton in the third quarter of 2017 increased 2 percent from the second quarter of 2017 and increased 7 percent 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 percent decrease from the second quarter of 2017 and a 12 percent increase from the third quarter of 2016. Total third quarter steel mill shipments decreased 3 percent from the second quarter of 2017 and increased 18 percent from the third quarter of 2016. Third quarter of 2017 downstream steel products shipments to outside customers increased 10 percent from the second quarter of 2017 and increased 3 percent from the third quarter of 2016.
In the first 9 months of 2017, Nucor’s consolidated net sales increased 24 percent to $15.16 billion, compared with $12.25 billion in last year’s first nine months, and total tons shipped to outside customers increased 8 percent from the first nine months of 2016, while average sales price per ton increased 15 percent.
The average scrap and scrap substitute cost per ton used during the third quarter of 2017 was $317, an increase of 1 percent from $313 in the second quarter of 2017 and an increase of 26 percent compared with $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 $304, an increase of 35 percent from $225 in the first nine months of 2016. Overall operating rates at steel mills decreased to 83 percent in the third quarter of 2017 as compared to 88 percent in the second quarter of 2017 and increased from 74 percent in the third quarter of 2016.
Operating rates for the first 9 months of 2017 increased to 86 percent as compared with 80 percent for the first nine months of 2016.
Imports continue to negatively impact the U.S. steel industry. Through the first 9 months of 2017, finished steel imports accounted for an estimated 27 percent share of the U.S. market and have increased an estimated 15.1 percent compared to the same period last year. The industry continues to pursue trade cases to combat unfairly traded imports. Final determinations issued earlier this year against cut-to-length steel plate imports from twelve countries are having a positive impact as steel imports of these products have decreased in the first nine months of this year compared to the same period last year. The United States Department of Commerce has made several rulings imposing duties on additional steel products since the beginning of the year that are favorable to the domestic steel industry. Although slower than Nucor would like, they are encouraged by the steady progress being achieved through the prosecution of product and country specific trade cases. Nucor believes this success is due to the overwhelming evidence that foreign competitors receive support from illegal subsidies.
Approaching the end of 2017, Nucor is encouraged by a number of positive factors impacting the markets going into 2018. They see generally stable or improving market conditions for nonresidential construction, automotive, energy, heavy equipment and agriculture. Although illegally traded imports remain at unacceptable levels, Nucor is encouraged by the cumulative benefits of the domestic steel industry’s successful trade cases.
Nucor expects fourth quarter of 2017 earnings to be similar to slightly decreased from the third quarter of 2017, exclusive of the previously mentioned tax benefits recognized in the third quarter of 2017.
Published in the December 2017 Edition of American Recycler News