Nucor (NUE) Q3 2014 earnings summary

Executive summary

• Q3 net earnings were $245.4M, or $0.76 per diluted share, up 65% YoY and above guidance of $0.70-$0.75; net sales rose 15% to $5.70B.

• Nine-month net earnings were $503.5M, or $1.57 per diluted share, versus $317.5M and $0.99 in 2013; earnings increased 59% YoY.

Financial highlights

• Q3 outside shipments rose 10% YoY to 6.784M tons; average selling price increased 5% to $840 per ton.

• Q3 gross margin was $599.6M, or 11% of sales, versus $408.5M, or 8%, in Q3 2013; nine-month gross margin was $1.39B versus $1.02B.

• Operating cash flow was $925.6M in the first nine months; working capital changes used $205.7M.

• Q3 included a $12.5M asset write-down charge, or $0.03 per share; SG&A was $153M.

Outlook and guidance

• Q4 earnings were expected to decline moderately from Q3 on typical year-end seasonality, but remain well above Q4 2013 EPS of $0.53.

• Louisiana DRI's Q4 financial impact was expected to be below its Q3 loss of approximately $45M; management anticipated significant improvement and profitability in Q1 2015.

• 2014 capital spending was estimated at $600M; preliminary 2015 spending was estimated at $500M versus approximately $700M of depreciation and amortization.

• Non-residential construction was forecast to grow 7%-8% in 2014 and 7%-9% in 2015 by square footage, with seasonal Q4 slowing and stronger Q1 activity expected.