Nucor (NUE) Q2 2012 earnings summary

Executive summary

• Q2 net earnings attributable to stockholders were $112.3M, or $0.35 per diluted share, versus $299.8M and $0.94 per share in Q2 2011.

• Results reflected lower steel pricing and margins, scrap-processing weakness, and a $30M Duferdofin impairment; steel products returned to quarterly profitability.

Financial highlights

• Q2 net sales were $5.10B, up 1% QoQ and nearly flat YoY; H1 net sales rose 2% to $10.18B.

• H1 net earnings fell to $257.4M from $459.6M, with diluted EPS of $0.81 versus $1.44.

• Q2 outside shipments rose 6% YoY to 5.925M tons as average selling price per ton fell 6% to $861; H1 outside shipments increased 2% with average price unchanged.

• H1 operating cash flow rose 53% to $446.5M; capital expenditures were $383.4M.

Outlook and guidance

• Q3 earnings excluding one-time charges were expected to decline modestly; lower scrap costs and stabilization, reduced sheet imports, and lower operating rates among newer domestic entrants could support results.

• Q3 production was expected at similar levels to Q2, with volumes holding; lower scrap and some sheet-price recovery could help, subject to market volatility.

• 2012 capital expenditures were projected at ~$1B, including ~$500M for Louisiana DRI versus ~$50M in 2011.

• The 2.5M-ton Louisiana DRI facility remained on track for completion and startup in mid-2013, subject to weather and Mississippi River water-level risks.