) announced that its board of directors has approved an increase
in its regular quarterly cash dividend to 36.75 cents from 36.50
cents. The increased dividend will be paid on February 11, 2013
to shareholders of record as of Dec 31, 2012.
Nucor has a track record of increasing its dividend almost
every year since it started paying dividends in 1973. The
increase in dividend reflects the company's strong potential to
generate a consistent stream of earnings in the long term.
Many companies are also reviewing their dividend policies, as
investors would need to pay higher taxes on dividend from next
year. Since 2003, investors were required to pay a maximum 15% on
dividend income, which will be scrapped in January next year. For
the highest income bracket, the tax rate on dividends could go up
In October 2012, Nucor released its third quarter 2012
results. The company reported adjusted (excluding special items)
earnings of 45 cents per share in the quarter, ahead of the Zacks
Consensus Estimate of 42 cents. The adjusted earnings exclude
costs associated with the buyout of Skyline Steel and loss on
divestiture of the assets of Nucor Wire Products Pennsylvania,
Profit (as reported) came in at $110.3 million or 35 cents a
share, down 39% from $181.5 million or 57 cents reported a year
ago. The bottom line was hurt by lower operating profits at the
company's steel mills, especially in sheet and plate.
Revenues slid 8.6% year over year to $4,801 million, missing
the Zacks Consensus Estimate of $4,856 million. An 8% fall in
average sales price weighed on Nucor's revenues in the quarter.
Total tons shipped to outside customers dipped 0.3% to 5.8
million tons and total mill shipments decreased 1.7% to 5.0
million tons in the reported quarter.
Nucor, which competes with
Commercial Metals Co.
United States Steel Corp.
), maintains a Zacks #3 Rank, which translates into a short-term
(1 to 3 months) Hold rating. We currently have a long-term (more
than 6 months) Neutral recommendation on the shares of the
COMMERCIAL METL (CMC): Free Stock Analysis
NUCOR CORP (NUE): Free Stock Analysis Report
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