Nucor(NUE) - 2024 Q1 - Quarterly Results

Q1 2024 Performance Overview Nucor reported strong Q1 2024 financial results with increased earnings and strategic advancements despite moderating steel market conditions Financial Highlights Nucor reported net earnings of $844.8 million, or $3.46 per diluted share, on net sales of $8.14 billion for the first quarter of 2024, with earnings and EPS increasing sequentially but decreasing year-over-year Financial Performance Summary | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Net Sales | $8.14 billion | $7.70 billion | $8.71 billion | | Net Earnings (to Nucor stockholders) | $844.8 million | $785.4 million | $1.14 billion | | Diluted EPS | $3.46 | $3.16 | $4.45 | | EBITDA | $1.50 billion | N/A | $1.89 billion | - CEO Leon Topalian noted that the company's performance remains strong despite steel market conditions moderating from post-pandemic highs[2] - Strategic initiatives in Q1 included broadening capabilities for the data center market, forming new partnerships for low-carbon steel, and introducing a new consumer spot price for hot-rolled coil products[2] Financial and Operational Review In Q1 2024, consolidated net sales increased 6% sequentially to $8.14 billion, driven by higher shipment volumes and average sales price per ton, while the steel mill operating rate improved to 82% Key Financial and Operational Metrics | Metric | Q1 2024 vs Q4 2023 | Q1 2024 vs Q1 2023 | | :--- | :--- | :--- | | Consolidated Net Sales | +6% | -7% | | Average Sales Price per Ton | +1% | -3% | | Tons Shipped to Outside Customers | +5% | -3% | | Total Steel Mill Shipments | +7% | -2% | - The average scrap and scrap substitute cost per gross ton increased by 6% sequentially to $421 in Q1 2024, and was up 2% year-over-year[6] - Overall operating rates at the company's steel mills increased to 82% in Q1 2024, compared to 74% in Q4 2023 and 79% in Q1 2023[7] Segment Performance The steel mills segment earnings increased in Q1 2024 compared to Q4 2023 due to higher prices and volumes, while the steel products segment saw a decrease in earnings Earnings Before Income Taxes by Segment | Segment | Earnings Before Income Taxes (in thousands) Q1 2024 | Earnings Before Income Taxes (in thousands) Q1 2023 | | :--- | :--- | :--- | | Steel mills | $1,102,251 | $838,388 | | Steel products | $511,559 | $970,802 | | Raw materials | $9,581 | $58,140 | - Compared to Q4 2023, the steel mills segment earnings increased due to higher average selling prices and volumes, particularly at sheet mills[10] - Compared to Q4 2023, the steel products segment earnings decreased due to lower average selling prices and decreased volumes[10] Financial Position and Shareholder Returns Nucor maintains a robust financial position with substantial cash reserves and actively returns capital to stockholders through share repurchases and consistent dividends Financial Strength Nucor maintained a strong financial position at the end of Q1 2024, with $5.54 billion in cash and equivalents, an undrawn revolving credit facility, and top-tier credit ratings - At the end of Q1 2024, Nucor had $5.54 billion in cash and cash equivalents, short-term investments, and restricted cash[8] - The company's $1.75 billion revolving credit facility remains undrawn and expires in November 2026[8] - Nucor holds credit ratings of A- (S&P), A- (Fitch), and Baa1 (Moody's), all with stable outlooks[8] Commitment to Returning Capital to Stockholders During Q1 2024, Nucor repurchased approximately 5.5 million shares and declared its 204th consecutive quarterly cash dividend, underscoring its dedication to shareholder returns - Repurchased approximately 5.5 million shares of common stock at an average price of $180.79 per share in Q1 2024[9] - Approximately $2.32 billion remains authorized for future share repurchases with no expiration date[9] - The Board of Directors declared a cash dividend of $0.54 per share, marking the 204th consecutive quarterly cash dividend[9] Outlook and Disclosures Nucor anticipates a decrease in Q2 2024 earnings primarily due to lower steel prices, while providing essential forward-looking statement disclosures Second Quarter of 2024 Outlook Nucor expects overall earnings to decrease in Q2 2024 compared to Q1 2024, driven by lower average selling prices in steel mills and products, partially offset by higher volumes and improved raw materials profitability - Overall earnings in Q2 2024 are expected to decrease compared to Q1 2024[11] - The steel mills segment is expected to see decreased earnings due to lower average selling prices, partially offset by modestly increased volumes[11] - The steel products segment is expected to have moderately decreased earnings due to lower average selling prices, partially offset by increased volumes[11] - The raw materials segment's earnings are expected to be higher in Q2 2024 due to increased profitability of direct reduced iron (DRI) facilities and scrap operations[11] Forward-Looking Statements This report includes forward-looking statements that involve risks and uncertainties, with actual results potentially varying materially due to factors like competitive pressures, trade policies, and market demand - The news release contains "forward-looking statements" that involve risks and uncertainties, and actual results may vary materially from projections[17] - Factors that could cause results to differ include competitive pressure, trade policies, raw material costs, market demand for steel products, and global economic uncertainties[17] Detailed Financial Statements Comprehensive financial statements for Q1 2024 reveal key performance metrics, balance sheet details, cash flow activities, and non-GAAP reconciliations Tonnage Data In Q1 2024, total steel mill shipments decreased by 2% year-over-year to 5.9 million tons, and total sales to outside customers fell by 3% to 6.2 million tons, despite increases in sheet and structural shipments Tonnage Shipments (in thousands) | Tonnage (in thousands) | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Steel mills total shipments | 5,890 | 6,035 | -2% | | Sheet | 2,974 | 2,819 | 5% | | Bars | 1,912 | 2,169 | -12% | | Sales tons to outside customers | 6,224 | 6,443 | -3% | | Steel mills | 4,676 | 4,804 | -3% | | Steel products (total) | 925 | 1,141 | -19% | | Raw materials | 583 | 498 | 17% | Condensed Consolidated Statements of Earnings For Q1 2024, Nucor's net sales were $8.14 billion, a 7% decrease from Q1 2023, with net earnings attributable to stockholders declining to $844.8 million, resulting in a diluted EPS of $3.46 Condensed Consolidated Statements of Earnings (in thousands, except per share data) | (In thousands, except per share data) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net sales | $8,137,083 | $8,709,980 | | Earnings before income taxes | $1,225,341 | $1,596,784 | | Net earnings attributable to Nucor stockholders | $844,841 | $1,136,542 | | Diluted net earnings per share | $3.46 | $4.45 | Condensed Consolidated Balance Sheets As of March 30, 2024, Nucor reported total assets of $33.93 billion, a decrease from year-end 2023 primarily due to reduced cash, with corresponding decreases in total liabilities and a slight dip in stockholders' equity Condensed Consolidated Balance Sheets (in thousands) | (In thousands) | March 30, 2024 | Dec. 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $4,557,759 | $6,383,298 | | Total current assets | $14,642,679 | $16,385,858 | | Total assets | $33,932,525 | $35,340,499 | | Liabilities & Equity | | | | Total current liabilities | $3,645,976 | $4,594,509 | | Total liabilities | $12,207,006 | $13,216,745 | | Total Nucor stockholders' equity | $20,693,713 | $20,940,634 | | Total liabilities and equity | $33,932,525 | $35,340,499 | Condensed Consolidated Statements of Cash Flows In Q1 2024, cash provided by operating activities significantly decreased to $459.7 million, while cash used in investing and financing activities increased, leading to a net decrease in cash of $1.83 billion Condensed Consolidated Statements of Cash Flows (in thousands) | (In thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Cash provided by operating activities | $459,653 | $1,207,173 | | Cash used in investing activities | ($889,728) | ($769,783) | | Cash used in financing activities | ($1,395,546) | ($920,674) | | (Decrease) Increase in cash | ($1,828,987) | ($480,041) | | Cash at end of period | $4,557,805 | $3,881,179 | Non-GAAP Reconciliation (EBITDA) Nucor's EBITDA for Q1 2024 was $1.50 billion, a decrease from $1.89 billion in Q1 2023, calculated by adjusting net earnings for depreciation, amortization, net interest, and taxes Reconciliation of EBITDA (in thousands) | Reconciliation of EBITDA (In thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net earnings before noncontrolling interests | $958,962 | $1,231,629 | | Depreciation | $256,938 | $221,089 | | Amortization | $58,683 | $58,769 | | Interest (income) expense, net | ($37,787) | $10,183 | | Provision for income taxes | $266,379 | $365,155 | | EBITDA | $1,503,175 | $1,886,825 |