Nucor(US:NUE)2023-02-28 16:00Financial Performance - Nucor reported consolidated net earnings of $7.61 billion, or $28.79 per diluted share, in 2022, marking the most profitable year in the company's history, surpassing the previous record of $6.83 billion in 2021 [179]. - Total net sales increased by 14% from $36.48 billion in 2021 to $41.51 billion in 2022, driven by a 26% increase in average sales price per ton from $1,292 to $1,626 [183]. - Steel products segment earnings more than tripled in 2022 compared to 2021, primarily due to strong demand in nonresidential construction markets [179]. - Joist sales decreased by 4% to $671 million in 2022 from $702 million in 2021, while total steel products sales increased by 1% to $5.015 billion [188]. - Nucor reported net earnings of $7.61 billion, or $28.79 per diluted share, in 2022, compared to $6.83 billion, or $23.16 per diluted share, in 2021 [207]. - Gross margins increased to $12.50 billion (30%) in 2022, up from $11.03 billion (30%) in 2021, driven by strong demand in nonresidential construction markets [190]. Sales and Production - Total tons shipped to outside customers decreased by 10% from 28.25 million tons in 2021 to 25.52 million tons in 2022 [183]. - The steel mills segment experienced an 11% increase in average sales price per ton, from $1,195 in 2021 to $1,324 in 2022, despite a 10% decrease in tons sold [187]. - Operating rates at Nucor's steel mills decreased to 77% in 2022 from 94% in 2021, contributing to a decrease in earnings for the steel mills segment [181]. Raw Materials and Costs - The raw materials segment's earnings decreased due to lower volumes and a $96 million write-off related to unproved oil and gas properties [181]. - Nucor's investment in DRI production and scrap brokerage provides significant flexibility in optimizing raw material costs, reducing risks associated with global sourcing [172]. - Average selling price per ton for steel products increased by 54% from $1,954 in 2021 to $3,003 in 2022, contributing to a 55% increase in net sales for the steel products segment [188]. Cash Flow and Investments - Cash provided by operating activities increased to $10.07 billion in 2022, up from $6.23 billion in 2021, driven by changes in operating assets and liabilities and an increase in net earnings of $957.3 million [220]. - Cash used in investing activities rose to $5.70 billion in 2022 from $2.87 billion in 2021, primarily due to $3.55 billion spent on acquisitions, including CHI and a 51% stake in CSI [221]. - Nucor returned approximately $3.30 billion to stockholders in 2022 through dividends and share repurchases, with a minimum of 40% of net earnings intended for return to stockholders [218]. Debt and Equity - Nucor's long-term debt was $6.67 billion as of December 31, 2022, with a funded debt to total capital ratio of 25% [231]. - Return on average stockholders' equity was 46.9% in 2022, down from 55.0% in 2021 [207]. - The current ratio improved to 3.4 at year-end 2022 from 2.5 at year-end 2021, influenced by higher cash and cash equivalents [215]. Future Outlook - The company anticipates that funding from the Infrastructure Investment & Jobs Act will significantly impact the market in 2023, enhancing demand for domestically produced steel [164]. - Capital expenditures for 2023 are projected to be approximately $3.0 billion, an increase from $2.0 billion in 2022, focusing on ongoing expansions and new projects [221]. - The profitability of the steel mills segment is expected to increase in Q1 2023 compared to Q4 2022, driven by higher margins and volumes [232]. Impairments and Risks - Nucor recorded a $27.0 million non-cash impairment charge in 2020 due to new regulatory rules in Colorado affecting drilling setback distances [242]. - The carrying value of remaining unproved oil and natural gas properties of $96.0 million was written off in the fourth quarter of 2022 [243]. - Nucor's forward-looking statements are subject to various risks, including competitive pressure, market demand fluctuations, and regulatory changes [257]. Currency and Market Sensitivity - Nucor is exposed to foreign currency risk primarily through operations in Canada, Europe, and Mexico, and uses derivative contracts to mitigate this risk [268]. - A hypothetical 10% change in the market price of natural gas could negatively affect pre-tax earnings by $14.18 million, while a 25% change could result in a $35.44 million impact [266]. - A 10% change in the market price of aluminum could negatively affect pre-tax earnings by $6.34 million, and a 25% change could result in a $15.85 million impact [266]. - A 10% change in the market price of copper could negatively affect pre-tax earnings by $2.04 million, while a 25% change could result in a $5.12 million impact [266].