) adjusted (excluding special items) earnings of 49 cents per
share for the third quarter of 2013 surpassed the Zacks Consensus
Estimate of 38 cents. The adjusted earnings exclude charges of
$14 million or 3 cents a share associated with the collapse of a
storage dome at a new plant in Louisiana.
Profit (as reported) for the quarter came in at $147.6 million
(or 46 cents a share), up 34% from $110.3 million or 35 cents per
share reported a year ago. The results were aided by improvement
in demand across some end markets and restocking of inventory by
Earnings for the third quarter were affected by the collapse
of a storage dome at Nucor Steel Louisiana in St. James Parish on
Sep 25 which led to a partial write down of inventory and fixed
asset balances related to it. The collapse also delayed the
opening of the new direct reduced iron (DRI) plant being
constructed at the site. However, the collapse has not resulted
in any injuries or any environmental damage.
The Quarter in Details
Revenues increased 3% year over year to roughly $4,941
million, beating the Zacks Consensus Estimate of $4,759 million.
However, a 4% year-over-year fall in average sales price weighed
on revenues in the quarter. Total tons shipped to outside
customers rose 7% year over year to 6,166,000 tons in the
reported quarter and total mill shipments increased 6% to
Better pricing for sheet steel improved operating performance
in the steel mills segment in the quarter compared with the
previous quarter. Profitability for sheet steel also improved due
to competitor supply disruptions, inventory restocking by
customers and demand improvement. Profitability of the structural
steel also improved owing to Nucor-Yamato Steel's higher
production. Fabricated construction products businesses also
showed operating profits in five of its last six quarters.
The average scrap and scrap substitute cost per ton used in
the third quarter was $372, down 2% from $380 a year ago. Overall
operating rates at Nucor's steel mills were 78%, up 7% compared
with the year-ago quarter.
The company had ample liquidity on its books as of Sep 28,
2013, with $1,771.7 million in cash and cash equivalents,
short-term investments and restricted cash. It also has an unused
$1.5 billion revolving credit facility that will now mature in
Aug 2018 after the amendment and restatement of the maturity
date. Cash flow from operations was $883.6 million for nine
months ended Sep 28, 2013, compared with $1,124.6 million
recorded a year ago.
Nucor issued $500 million of 4.00% notes due in 2023 and $500
million of 5.20% notes due in 2043 in the third quarter. The bond
offering helped to refinance $900 million of debt.
Nucor's Board declared a cash dividend of 36.75 cents per
share in Sep 2013, which was the company's 162nd consecutive
quarterly cash dividend. The dividend is payable on Nov 8, 2013,
to stockholders of record as of Sep 27, 2013.
Nucor expects the fourth quarter to show moderately lower
earnings given lower shipping volumes due to seasonal
factors. In addition, planned outages are expected at SBQ
mill in Norfolk, NE, at sheet mill in Berkeley County, SC, and at
structural mill in Blytheville, AR, in connection with previously
declared capital expansion projects at those facilities. However,
metal margins are expected to be stable.
Nucor currently retains a Zacks Rank #3 (Hold).
Other companies in the steel industry with favorable Zacks
Companhia Siderurgica Nacional
Shiloh Industries Inc.
). While Companhia Siderurgica and Shiloh hold a
Zacks Rank #1 (Strong Buy), Gerdau retains a Zacks Rank #2
GERDAU SA ADR (GGB): Free Stock Analysis
NUCOR CORP (NUE): Free Stock Analysis Report
SHILOH INDS INC (SHLO): Get Free Report
CIA SIDERUR-ADR (SID): Free Stock Analysis
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