Nucor (NUE) Q1 2012 earnings summary

Executive summary

• Q1 diluted EPS was $0.46, above guidance of $0.30–$0.35; net sales rose 5% YoY to $5.073B, while net earnings declined to $145.1M from $159.8M.

• Stronger March shipments and a $12.6M non-cash state tax adjustment (~$0.04 per diluted share) helped results; weak construction, import pressure and raw-materials margin weakness were offsets.

• Earnings improved from Q4 2011's $0.43 per share, which included ~$0.08 per share of non-recurring gains; Q2 earnings were expected to improve modestly.

Financial highlights

• Net earnings attributable to stockholders were $145.1M versus $159.8M in Q1 2011 and $137.1M in Q4 2011; diluted EPS was $0.46, $0.50 and $0.43, respectively.

• Net sales were $5.073B versus $4.834B YoY; average sales price per ton rose 6%, while outside shipments declined 1%.

• Gross margin was $380.5M, or 8% of sales, versus $423.7M, or 9%, in Q1 2011; LIFO charge was $14.5M versus $31.0M.

• Operating cash flow was $207.7M versus $47.5M in Q1 2011; capital expenditures were $167.3M.

• Effective tax rate was 27.4% before adjusting for JV partners' share of profits, or 29.8% after that adjustment; excluding tax adjustments and JV profits, it was 35%–36%.

Outlook and guidance

• Q2 earnings were expected to improve modestly; volume and some product prices were expected to rise modestly, while other prices could be flat to down.

• FY 2012 effective tax rate was expected to be ~31.6%, versus 31.2% in FY 2011.

• 2012 capital expenditures were projected at ~$1.00B versus $440.5M in 2011; Louisiana DRI spending was expected to reach ~$450M, up from ~$50M in 2011.

• Funds from operations, available cash and investments, and borrowing capacity were expected to cover capital and working-capital needs for at least 24 months.