Nucor Corporation announced consolidated net earnings of $107.8 million, or $0.35 per diluted share, for the fourth quarter of 2019. Included in the fourth quarter of 2019 earnings are non-cash impairment charges of $66.9 million, or $0.17 per diluted share.
By comparison, Nucor reported consolidated net earnings of $275.0 million, or $0.90 per diluted share, for the third quarter of 2019 and consolidated net earnings of $646.8 million, or $2.07 per diluted share, for the fourth quarter of 2018.
For the full year 2019, Nucor reported consolidated net earnings of $1.27 billion, or $4.14 per diluted share, compared to $2.36 billion, or $7.42 per diluted share, in 2018.
“Stronger than expected steel mill segment performance in December was the primary driver for higher actual fourth quarter earnings than we indicated in our mid-December quantitative guidance,” said Leon Topalian, Nucor’s president and chief executive officer. “We believe that the inventory destocking that occurred throughout most of 2019 concluded in the fourth quarter, when customers resumed more normal buying patterns. Additionally, general business conditions improved in the fourth quarter due to a number of factors, including a rate cut by the Federal Reserve, the new labor agreement between the United Automobile Workers and GM, and definitive progress on the trade front.”
“For the full year, strong performance in many of our steel products businesses partially offset the impact of destocking on our steelmaking operations. In particular, our Vulcraft/Verco and Building Systems groups both achieved record profitability in 2019, reflecting both strong execution by our teammates and favorable nonresidential construction market conditions.”
The average scrap and scrap substitute cost per gross ton used in the fourth quarter of 2019 was $275, an 8 percent decrease compared to $299 in the third quarter of 2019 and a decrease of 23 percent compared to $359 in the fourth quarter of 2018. The average scrap and scrap substitute cost per gross ton used for the full year 2019 was $314, a decrease of 13 percent from $361 for the full year 2018.
Overall operating rates at the company’s steel mills remained flat at 83 percent in the fourth quarter of 2019 as compared to the third quarter of 2019 and decreased compared to 88 percent in the fourth quarter of 2018. Operating rates for the full year 2019 decreased to 84 percent as compared to 91 percent for the full year 2018.
Nucor’s liquidity position remains strong with $1.83 billion in cash and cash equivalents and short-term investments as of December 31, 2019 and an untapped $1.50 billion revolving credit facility that does not expire until April 2023.
Published in the March 2020 Edition