News Release:
Nucor Reports Results for Fourth Quarter and Year Ended 2017
Earnings (loss) before income taxes and noncontrolling interests by segment were as follows for the fourth quarter and full year 2017 and 2016 (in thousands):
Three Months (13 Weeks) Ended |
Twelve Months (52 Weeks) Ended |
|||||||
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|||||
Steel mills |
$ 349,958 |
$ 321,270 |
$ 2,084,203 |
$ 1,724,168 |
||||
Steel products |
74,849 |
52,079 |
206,805 |
249,970 |
||||
Raw materials |
26,721 |
(18,881) |
129,296 |
(95,121) |
||||
Corporate/eliminations |
(129,287) |
(99,428) |
(670,347) |
(580,358) |
||||
$ 322,241 |
$ 255,040 |
$ 1,749,957 |
$ 1,298,659 |
Included in the fourth quarter of 2017 results was a net benefit of
For fiscal 2017,
The average scrap and scrap substitute cost per ton used in the fourth quarter of 2017 was
Overall operating rates at our steel mills decreased to 81% in the fourth quarter of 2017 as compared to 83% in the third quarter of 2017 and increased compared to 72% in the fourth quarter of 2016. Steel mill operating rates for the full year 2017 increased to 85% as compared to 78% for the full year 2016.
Total steel mill energy costs in the fourth quarter of 2017 decreased approximately
Our liquidity position remains strong with
In November,
Also in November,
In December,
Imports continue to negatively impact the U.S. steel industry. Total steel imports in 2017 increased by more than five million net tons, or 15.5%, compared to 2016. Additionally, finished steel imports accounted for an estimated 27% share of the U.S. market. Along with other domestic steel producers,
The profitability of the steel mills segment in the fourth quarter of 2017 decreased from the third quarter of 2017 due to margin compression as imports, which surged in the summer of 2017, continued to work through to our end markets. Weakness in plate steel negatively impacted the earnings of the steel mills segment in the fourth quarter of 2017 as compared to the third quarter of 2017. The performance of the steel products segment during the fourth quarter of 2017 improved compared to the third quarter of 2017. The performance of the raw materials segment in the fourth quarter of 2017 was better compared to the third quarter of 2017 due to the improved performance of our direct reduced iron facilities.
Earnings in the first quarter of 2018 are expected to increase compared to the fourth quarter of 2017, exclusive of the benefit recorded in the fourth quarter of 2017 related to tax reform. We believe there is significant optimism in steel end use markets and are encouraged by positive pricing momentum building throughout the quarter for all of our steel mill products. Coupled with these positive trends, first quarter of 2018 results will be negatively impacted by higher scrap prices and weather related interruptions at some of our sheet mills. We expect decreased earnings in the steel products segment due to typical seasonality. We expect earnings in our raw materials segment in the first quarter of 2018 to improve compared to the fourth quarter of 2017.
Nucor and its affiliates are manufacturers of steel products, with operating facilities primarily in the U.S. and Canada. Products produced include: carbon and alloy steel -- in bars, beams, sheet and plate; hollow structural section tubing; electrical conduit; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; steel grating; and wire and wire mesh. Nucor, through The David J. Joseph Company, also brokers ferrous and nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America's largest recycler.
Certain statements contained in this news release are "forward-looking statements" that involve risks and uncertainties. The words "believe," "expect," "project," "will," "should," "could" and similar expressions are intended to identify those forward-looking statements. Factors that might cause the Company's actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: (1) competitive pressure on sales and pricing, including competition from imports and substitute materials; (2) the sensitivity of the results of our operations to prevailing steel prices and the changes in the supply and cost of raw materials, including scrap steel; (3) market demand for steel products; and (4) energy costs and availability. These and other factors are discussed in
You are invited to listen to the live broadcast of
TONNAGE DATA |
||||||||||||
(in thousands) |
||||||||||||
Three Months (13 Weeks) Ended |
Twelve Months (52 Weeks) Ended |
|||||||||||
Dec. 31, 2017 |
Dec. 31, 2016 |
Percentage Change |
Dec. 31, 2017 |
Dec. 31, 2016 |
Percentage Change |
|||||||
Steel mills total shipments: |
||||||||||||
Sheet |
2,566 |
2,225 |
15% |
10,607 |
9,735 |
9% |
||||||
Tubular products |
225 |
86 |
162% |
917 |
86 |
966% |
||||||
Bars |
1,982 |
1,794 |
10% |
8,009 |
7,307 |
10% |
||||||
Structural |
557 |
511 |
9% |
2,295 |
2,332 |
-2% |
||||||
Plate |
556 |
471 |
18% |
2,300 |
2,041 |
13% |
||||||
Other |
173 |
64 |
170% |
590 |
440 |
34% |
||||||
6,059 |
5,151 |
18% |
24,718 |
21,941 |
13% |
|||||||
Sales tons to outside customers: |
||||||||||||
Steel mills |
4,998 |
4,400 |
14% |
20,618 |
18,846 |
9% |
||||||
Joist |
140 |
123 |
14% |
472 |
445 |
6% |
||||||
Deck |
128 |
110 |
16% |
457 |
442 |
3% |
||||||
Cold finished |
126 |
98 |
29% |
487 |
426 |
14% |
||||||
Fabricated concrete |
||||||||||||
reinforcing steel |
285 |
258 |
10% |
1,142 |
1,115 |
2% |
||||||
Other |
865 |
826 |
5% |
3,316 |
3,035 |
9% |
||||||
6,542 |
5,815 |
13% |
26,492 |
24,309 |
9% |
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) |
|||||||
(In thousands, except per share data) |
|||||||
Three Months (13 Weeks) Ended |
Twelve Months (52 Weeks) Ended |
||||||
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
||||
Net sales |
$ 5,092,328 |
$ 3,956,538 |
$ 20,252,393 |
$ 16,208,122 |
|||
Costs, expenses and other: |
|||||||
Cost of products sold |
4,571,760 |
3,513,112 |
17,682,986 |
14,182,215 |
|||
Marketing, administrative and other expenses |
168,102 |
156,082 |
687,531 |
596,761 |
|||
Equity in earnings of unconsolidated affiliates |
(11,860) |
(8,525) |
(41,661) |
(38,757) |
|||
Interest expense, net |
42,085 |
40,829 |
173,580 |
169,244 |
|||
4,770,087 |
3,701,498 |
18,502,436 |
14,909,463 |
||||
Earnings before income taxes and |
|||||||
noncontrolling interests |
322,241 |
255,040 |
1,749,957 |
1,298,659 |
|||
Provision for income taxes |
(72,853) |
79,855 |
369,386 |
398,243 |
|||
Net earnings |
395,094 |
175,185 |
1,380,571 |
900,416 |
|||
Earnings attributable to |
|||||||
noncontrolling interests |
11,203 |
15,546 |
61,883 |
104,145 |
|||
Net earnings attributable to |
|||||||
Nucor stockholders |
$ 383,891 |
$ 159,639 |
$ 1,318,688 |
$ 796,271 |
|||
Net earnings per share: |
|||||||
Basic |
$1.20 |
$0.50 |
$4.11 |
$2.48 |
|||
Diluted |
$1.20 |
$0.50 |
$4.10 |
$2.48 |
|||
Average shares outstanding: |
|||||||
Basic |
319,210 |
319,921 |
319,990 |
319,563 |
|||
Diluted |
319,967 |
320,396 |
320,773 |
319,822 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
||||||
(In thousands) |
||||||
Dec. 31, 2017 |
Dec. 31, 2016 |
|||||
ASSETS |
||||||
Current assets: |
||||||
Cash and cash equivalents |
$ 949,104 |
$ 2,045,961 |
||||
Short-term investments |
50,000 |
150,000 |
||||
Accounts receivable, net |
2,028,545 |
1,631,676 |
||||
Inventories, net |
3,461,686 |
2,479,958 |
||||
Other current assets |
335,085 |
198,798 |
||||
Total current assets |
6,824,420 |
6,506,393 |
||||
Property, plant and equipment, net |
5,093,147 |
5,078,650 |
||||
Goodwill |
2,196,058 |
2,052,728 |
||||
Other intangible assets, net |
914,646 |
866,835 |
||||
Other assets |
812,987 |
718,912 |
||||
Total assets |
$ 15,841,258 |
$ 15,223,518 |
||||
LIABILITIES |
||||||
Current liabilities: |
||||||
Short-term debt |
$ 52,833 |
$ 17,959 |
||||
Long-term debt due within one year |
500,000 |
600,000 |
||||
Accounts payable |
1,181,346 |
838,109 |
||||
Salaries, wages and related accruals |
516,660 |
428,829 |
||||
Accrued expenses and other current liabilities |
573,925 |
505,069 |
||||
Total current liabilities |
2,824,764 |
2,389,966 |
||||
Long-term debt due after one year |
3,242,242 |
3,739,141 |
||||
Deferred credits and other liabilities |
689,464 |
839,703 |
||||
Total liabilities |
6,756,470 |
6,968,810 |
||||
EQUITY |
||||||
Nucor stockholders' equity: |
||||||
Common stock |
151,960 |
151,734 |
||||
Additional paid-in capital |
2,021,339 |
1,974,672 |
||||
Retained earnings |
8,463,709 |
7,630,916 |
||||
Accumulated other comprehensive loss, |
||||||
net of income taxes |
(254,681) |
(317,843) |
||||
Treasury stock |
(1,643,291) |
(1,559,614) |
||||
Total Nucor stockholders' equity |
8,739,036 |
7,879,865 |
||||
Noncontrolling interests |
345,752 |
374,843 |
||||
Total equity |
9,084,788 |
8,254,708 |
||||
Total liabilities and equity |
$ 15,841,258 |
$ 15,223,518 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||||
(In thousands) |
||||||||
Twelve Months (52 Weeks) Ended |
||||||||
Dec. 31, 2017 |
Dec. 31, 2016 |
|||||||
Operating activities: |
||||||||
Net earnings |
$ 1,380,571 |
$ 900,416 |
||||||
Adjustments: |
||||||||
Depreciation |
635,833 |
613,192 |
||||||
Amortization |
91,228 |
73,862 |
||||||
Stock-based compensation |
64,176 |
56,511 |
||||||
Deferred income taxes |
(221,173) |
71,455 |
||||||
Distributions from affiliates |
49,295 |
40,602 |
||||||
Equity in earnings of unconsolidated affiliates |
(41,661) |
(38,757) |
||||||
Changes in assets and liabilities (exclusive of acquisitions and dispositions): |
||||||||
Accounts receivable |
(329,501) |
(217,736) |
||||||
Inventories |
(900,946) |
(132,639) |
||||||
Accounts payable |
314,817 |
236,788 |
||||||
Federal income taxes |
(107,577) |
3,555 |
||||||
Salaries, wages and related accruals |
83,625 |
133,544 |
||||||
Other operating activities |
32,576 |
9,127 |
||||||
Cash provided by operating activities |
1,051,263 |
1,749,920 |
||||||
Investing activities: |
||||||||
Capital expenditures |
(448,555) |
(604,840) |
||||||
Investment in and advances to affiliates |
(59,000) |
(63,167) |
||||||
Divestiture of affiliates |
- |
135,000 |
||||||
Disposition of plant and equipment |
25,315 |
18,571 |
||||||
Acquisitions (net of cash acquired) |
(544,041) |
(474,788) |
||||||
Purchases of investments |
(50,000) |
(650,000) |
||||||
Proceeds from the sale of investments |
150,000 |
600,000 |
||||||
Other investing activities |
7,389 |
14,106 |
||||||
Cash used in investing activities |
(918,892) |
(1,025,118) |
||||||
Financing activities: |
||||||||
Net change in short-term debt |
34,872 |
(33,360) |
||||||
Repayment of long-term debt |
(600,000) |
- |
||||||
Issuance of common stock |
11,145 |
15,751 |
||||||
Payment of tax withholdings on certain stock-based compensation |
(14,408) |
(12,387) |
||||||
Excess tax benefits from stock-based compensation |
- |
2,784 |
||||||
Distributions to noncontrolling interests |
(90,974) |
(99,588) |
||||||
Cash dividends |
(485,321) |
(481,083) |
||||||
Acquisition of treasury stock |
(90,304) |
(5,173) |
||||||
Other financing activities |
(3,241) |
(13,297) |
||||||
Cash used in financing activities |
(1,238,231) |
(626,353) |
||||||
Effect of exchange rate changes on cash |
9,003 |
8,043 |
||||||
(Decrease) increase in cash and cash equivalents |
(1,096,857) |
106,492 |
||||||
Cash and cash equivalents - beginning of year |
2,045,961 |
1,939,469 |
||||||
Cash and cash equivalents - end of year |
$ 949,104 |
$ 2,045,961 |
||||||
Non-cash investing activity: |
||||||||
Change in accrued plant and equipment purchases and |
||||||||
assets acquired by capital lease arrangements |
$ 58,519 |
$ 12,837 |
||||||
View original content:http://www.prnewswire.com/news-releases/nucor-reports-results-for-fourth-quarter-and-year-ended-2017-300590209.html
SOURCE
For Investor/Analyst Inquiries: Gregg Lucas, 704-972-1841; For Media Inquiries: Katherine Miller, 704-353-9015