Nucor Corporation (NYSE: NUE) announced consolidated net earnings of $501.8 million , or $1.63 per diluted share, for the first quarter of 2019. By comparison, Nucor reported consolidated net earnings of $646.8 million , or $2.07 per diluted share, for the fourth quarter of 2018 and $354.2 million , or $1.10 per diluted share, for the first quarter of 2018.

"Our diversified business model helped us to once again deliver a significant year-over-year improvement in first quarter earnings," said John Ferriola, Nucor's Chairman, Chief Executive Officer and President. "Our plate, bar, and structural mills were strong contributors in the first quarter, and several of our downstream businesses also increased earnings as compared to the year ago period."

Mr. Ferriola continued, "While we are focused on bringing new projects online to drive incremental earnings growth and margin expansion, we are also actively evaluating other profitable growth opportunities. We will remain disciplined and opportunistic, consistent with our focus on shareholder value creation. Overall, Nucor is well-positioned for continued growth and success, we are building on our strong momentum and we remain confident in our near-and long-term prospects."

Selected Segment Data
In the first quarter of 2018, the Company began reporting its tubular products and piling businesses as part of the steel products segment. These businesses were previously included in the steel mills segment. All prior period segment data presented in this news release has been recast to reflect this change. Earnings (loss) before income taxes and noncontrolling interests by segment were as follows for the fourth quarter and full year 2018 and 2017 (in thousands):

Financial Review
Nucor's consolidated net sales decreased 3% to $6.10 billion in the first quarter of 2019 compared with $6.30 billion in the fourth quarter of 2018, and increased approximately 10% compared with $5.57 billion in the first quarter of 2018. Included in the first quarter of 2019 results was a benefit of $33.7 million, or $0.08 per diluted share, related to the gain on the sale of an equity method investment in the raw materials segment. Included in the first quarter of 2018 results was an expense of $21.8 million, or $0.07 per diluted share, related to the write off of deferred tax assets due to the change in the tax status of a subsidiary.

Average sales price per ton in the first quarter of 2019 decreased 4% compared with the fourth quarter of 2018 and increased 13% compared with the first quarter of 2018. A total of 6,767,000 tons were shipped to outside customers in the first quarter of 2019, a 1% increase from fourth quarter of 2018 and a 3% decrease from the first quarter of 2018. Total steel mill shipments in the first quarter of 2019 increased 2% from the fourth quarter of 2018 and decreased 4% from the first quarter of 2018. Downstream steel products shipments to outside customers in the first quarter of 2019 decreased 2% from the fourth quarter of 2018 and decreased 3% from the first quarter of 2018.

The average scrap and scrap substitute cost per ton used during the first quarter of 2019 was $352, a 2% decrease compared to $359 in the fourth quarter of 2018 and an increase of 4% compared to $337 in the first quarter of 2018.

Pre-operating and start-up costs related to the Company's growth projects were $19.6 million, or $0.05 per diluted share, in the first quarter of 2019, compared with $17.4 million, or $0.04 per diluted share, in the fourth quarter of 2018 and $2.3 million, or $0.01 per diluted share, in the first quarter of 2018.

Overall operating rates at the Company's steel mills decreased to 87% in the first quarter of 2019 as compared to 88% in the fourth quarter of 2018 and 92% in the first quarter of 2018.

Nucor's liquidity position remains very strong with $1.6 billion in cash and cash equivalents as of March 30, 2019.

During the first quarter of 2019, Nucor repurchased approximately 1.2 million shares of its common stock for an average price of $60.69 per share. At March 30, 2019, Nucor had approximately 304,786,000 shares outstanding and approximately $1.4 billion available under its share repurchase program.

First Quarter of 2019 Analysis
As expected, earnings from the Company's steel mills segment in the first quarter of 2019 decreased from the fourth quarter of 2018 primarily due to lower average selling prices and margins for sheet products. In addition, unusually challenging winter conditions delayed shipments to certain construction customers of the Company's steel mills and steel products segments.

The performance of the raw materials segment decreased in the first quarter of 2019 as compared to the fourth quarter of 2018 due primarily to margin compression in Nucor's DRI businesses, which has experienced declining average selling prices since the fourth quarter of 2018.

Second Quarter of 2019 Outlook
Earnings in the second quarter of 2019 are expected to be similar to the first quarter of 2019, excluding the gain on the sale of the equity method investment. The performance of the steel mills segment in the second quarter of 2019 is anticipated to be consistent compared to the first quarter of 2019 as weakening margins for sheet and plate mill products are expected to be offset by improving margins for structural and bar mill products.

The profitability of Nucor's steel products segment in the second quarter of 2019 is expected to significantly improve as compared to the first quarter of 2019, as typical seasonal patterns and improved weather conditions should benefit nonresidential construction markets.

The performance of the raw materials segment is expected to decrease in the second quarter of 2019 as compared to the first quarter of 2019 due to further margin compression in the Company's DRI businesses.

TONNAGE DATA

(In thousands)

Related link: Official Report