Nucor Reports Record Quarterly Earnings for the Second Quarter of 2022

CHARLOTTE, N.C., July 21, 2022 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) today announced record quarterly consolidated net earnings of $2.56 billion, or $9.67 per diluted share, for the second quarter of 2022. By comparison, Nucor reported consolidated net earnings of $2.10 billion, or $7.67 per diluted share, for the first quarter of 2022 and $1.51 billion, or $5.04 per diluted share, for the second quarter of 2021.  

In the first six months of 2022, Nucor reported consolidated net earnings of $4.66 billion, or $17.30 per diluted share, compared with consolidated net earnings of $2.45 billion, or $8.13 per diluted share, in the first six months of 2021.

"Nucor's second quarter earnings of $9.67 per diluted share and first half earnings of $17.30 per diluted share both represent new records. Nucor's differentiated business model is yielding exceptional results. I would like to congratulate our teammates for delivering world class performance in safety and profitability while providing exceptional customer service," said Leon Topalian, Nucor's President and Chief Executive Officer. "Our team is focused on delivering the safest and most profitable year in our history!"

Selected Segment Data

Earnings (loss) before income taxes and noncontrolling interests by segment for the second quarter and first six months of 2022 and 2021 were as follows (in thousands):

Financial Review

Nucor's consolidated net sales increased 12% to $11.79 billion in the second quarter of 2022 compared with $10.49 billion in the first quarter of 2022 and increased 34% compared with $8.79 billion in the second quarter of 2021. Average sales price per ton in the second quarter of 2022 increased 3% compared with the first quarter of 2022 and increased 44% compared with the second quarter of 2021. A total of 6,977,000 tons were shipped to outside customers in the second quarter of 2022, a 9% increase from the first quarter of 2022 and a 7% decrease from the second quarter of 2021. Total steel mill shipments in the second quarter of 2022 increased 11% as compared to the first quarter of 2022 and decreased 4% as compared to the second quarter of 2021. Steel mill shipments to internal customers represented 22% of total steel mill shipments in the second quarter of 2022, compared with 22% in the first quarter of 2022 and 20% in the second quarter of 2021. Downstream steel product shipments to outside customers in the second quarter of 2022 increased 6% from the first quarter of 2022 and were similar to the second quarter of 2021.

In the first six months of 2022, Nucor's consolidated net sales of $22.29 billion were an increase of 41% compared with consolidated net sales of $15.81 billion reported in the first six months of 2021. Total tons shipped to outside customers in the first six months of 2022 were 13,371,000, a decrease of 9% from the first six months of 2021, while the average sales price per ton in the first six months of 2022 increased 55% from the first six months of 2021.

The average scrap and scrap substitute cost per gross ton used in the second quarter of 2022 was $534, an 8% increase compared to $495 in the first quarter of 2022 and a 17% increase compared to $457 in the second quarter of 2021. The average scrap and scrap substitute cost per gross ton used in the first six months of 2022 was $516, a 20% increase compared to $431 in the first six months of 2021.

Pre-operating and start-up costs related to the Company's growth projects were approximately $60 million, or $0.17 per diluted share, in the second quarter of 2022, compared with approximately $62 million, or $0.17 per diluted share, in the first quarter of 2022 and approximately $22 million, or $0.06 per diluted share, in the second quarter of 2021.

In the first six months of 2022, pre-operating and start-up costs related to the Company's growth projects were approximately $122 million, or $0.35 per diluted share, compared with approximately $41 million, or $0.10 per diluted share, in the first six months of 2021.

Overall operating rates at the Company's steel mills increased to 85% in the second quarter of 2022 as compared to 77% in the first quarter of 2022 and decreased compared to 97% in the second quarter of 2021. Operating rates in the first six months of 2022 decreased to 81% as compared to 96% in the first six months of 2021.

Financial Strength

At the end of the second quarter of 2022, we had $2.45 billion in cash and cash equivalents, short-term investments and restricted cash and cash equivalents on hand. The Company's $1.75 billion revolving credit facility remains undrawn and does not expire until November 2026.  Nucor continues to have the strongest credit rating in the North American steel sector (Baa1/A-) with stable outlooks at both Moody's and Standard & Poor's.

Commitment to Returning Capital to Stockholders

During the second quarter of 2022, Nucor repurchased approximately 5.1 million shares of its common stock at an average price of $157.37 per share (12.1 million shares year-to-date at an average price of $140.59 per share). As of July 2, 2022, Nucor had approximately 262,000,000 shares outstanding and approximately $2.14 billion remaining for repurchases under its existing authorized share repurchase program. This share repurchase authorization is discretionary and has no scheduled expiration date.

On June 9, 2022, Nucor's board of directors declared a cash dividend of $0.50 per share. This cash dividend is payable on August 11, 2022 to stockholders of record as of June 30, 2022 and is Nucor's 197^th consecutive quarterly cash dividend.

Second Quarter of 2022 Analysis

Second quarter earnings were driven by increased profitability in the steel products segment, which continued to benefit from robust demand in nonresidential construction markets. In addition, the steel mills segment earnings strengthened due primarily to increased profitability at our bar and plate mills. Similarly, Nucor's raw materials segment generated increased profits in the second quarter due to relatively higher selling prices for both direct reduced iron (DRI) and scrap. The second quarter also saw the closing of Nucor's acquisition of C.H.I. Overhead Doors, LLC.

Third Quarter of 2022 Outlook

As we enter the third quarter, demand remains stable and resilient across the major end-use markets we serve, and customer inventory levels appear right-sized relative to economic conditions.  Though we expect a decrease from the record-setting second quarter, we expect another strong quarter of profitability in the third quarter of 2022. We believe that 2022 will be the most profitable year in Nucor's history.

We expect the steel mills segment earnings to be sequentially lower in the third quarter of 2022, due to lower expected shipment volumes and average selling prices, particularly at our sheet and plate mills. The steel products segment is expected to have another very strong quarter in the third quarter of 2022, with earnings roughly in-line with the second quarter of 2022. Raw materials segment earnings are expected to improve in the third quarter of 2022 due to higher realized pricing at our DRI facilities.

Earnings Conference Call

You are invited to listen to the live broadcast of Nucor's conference call during which management will discuss Nucor's second quarter results on July 21, 2022 at 2:00 p.m. Eastern Time. The conference call will be available over the Internet at www.nucor.com, under Investors.

About Nucor

Nucor and its affiliates are manufacturers of steel and steel products, with operating facilities in the United States, Canada and Mexico. Products produced include: carbon and alloy steel -- in bars, beams, sheet and plate; hollow structural section tubing; electrical conduit; steel racking; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; precision castings; steel fasteners; metal building systems; insulated metal panels; overhead doors; steel grating; and wire and wire mesh. Nucor, through The David J. Joseph Company and its affiliates, also brokers ferrous and nonferrous metals, pig iron and hot briquetted iron / direct reduced iron; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America's largest recycler.

Forward-Looking Statements

Certain statements contained in this news release are "forward-looking statements" that involve risks and uncertainties which we expect will or may occur in the future and may impact our business, financial condition and results of operations. The words "anticipate," "believe," "expect," "intend," "project," "may," "will," "should," "could" and similar expressions are intended to identify those forward-looking statements. These forward-looking statements reflect the Company's best judgment based on current information, and, although we base these statements on circumstances that we believe to be reasonable when made, there can be no assurance that future events will not affect the accuracy of such forward-looking information. As such, the forward-looking statements are not guarantees of future performance, and actual results may vary materially from the projected results and expectations discussed in this news release. 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 pressure from imports and substitute materials; (2) U.S. and foreign trade policies affecting steel imports or exports; (3) the sensitivity of the results of our operations to prevailing market steel prices and changes in the supply and cost of raw materials, including pig iron, iron ore and scrap steel; (4) the availability and cost of electricity and natural gas, which could negatively affect our cost of steel production or result in a delay or cancellation of existing or future drilling within our natural gas drilling programs; (5) critical equipment failures and business interruptions; (6) market demand for steel products, which, in the case of many of our products, is driven by the level of nonresidential construction activity in the United States; (7) impairment in the recorded value of inventory, equity investments, fixed assets, goodwill or other long-lived assets; (8) uncertainties surrounding the global economy, including excess world capacity for steel production, inflation and interest rate changes; (9) fluctuations in currency conversion rates; (10) significant changes in laws or government regulations affecting environmental compliance, including legislation and regulations that result in greater regulation of greenhouse gas emissions that could increase our energy costs, capital expenditures and operating costs or cause one or more of our permits to be revoked or make it more difficult to obtain permit modifications; (11) the cyclical nature of the steel industry; (12) capital investments and their impact on our performance; (13) our safety performance; (14) our ability to integrate the operations of C.H.I. Overhead Doors, LLC and certain of its affiliates; and (15) the impact of the COVID-19 pandemic and any variants of the virus. These and other factors are discussed in Nucor's regulatory filings with the United States Securities and Exchange Commission, including those in "Item 1A. Risk Factors" of Nucor's Annual Report on Form 10-K for the year ended December 31, 2021. The forward-looking statements contained in this news release speak only as of this date, and Nucor does not assume any obligation to update them, except as may be required by applicable law.

SOURCE Nucor Corporation

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