01—Abstract
Summary
Summary of the 10-K filed March 1, 2023. Cited figures are marked; the original filing is the authoritative source.
Nucor Corporation, a Delaware corporation, manufactures steel and steel products and produces direct reduced iron (DRI) for its steel mills, and it reports results in three segments: steel mills, steel products and raw materials.
In 2022 Nucor reported record net earnings attributable to Nucor stockholders of $7.61 billiona, or $28.79 per diluted share, on net sales of $41.51 billion, up 14% from 2021. Steel products was the main driver: its net sales rose 55% to $15.06 billion, and its earnings before income taxes reached $4.09 billion versus $1.29 billion in 2021. Steel mills net sales were comparable to 2021 at $24.19 billion, but segment earnings fell to $7.20 billion from $9.74 billion as sheet mill profitability declined and utilization dropped to 77% from 94%.
The company ended 2022 with cash, short-term investments and restricted cash of $4.94 billionb, debt to total capital of about 25%, and an undrawn $1.75 billion revolving credit facility. Nucor repurchased $2.76 billion of stock and paid $1.51 billion in dividends over the past three years, and it intends to return at least 40% of net earnings to stockholders. Capital expenditures for 2023 are estimated at approximately $3.0 billion, primarily for the plate mill in Brandenburg, Kentucky, the sheet mill expansions in Kentucky and Indiana, and the new sheet mill in Mason County, West Virginia, whose estimated net cash outlay rose to $3.1 billion from $2.7 billion.
The company's acquisition program included California Steel Industries (51% controlling interest, February 2022) and C.H.I. Overhead Doors (approximately $3.00 billionc, June 2022), its largest acquisition in history. Management expects first-quarter 2023 steel mill profitability to increase from the fourth quarter of 2022, with steel products earnings remaining strong, though consolidated net earnings are expected to decline because of intercompany eliminations and the absence of fourth-quarter 2022 state tax benefits.
02—Key points
Key Highlights
- Record 2022 net earnings attributable to Nucor stockholders of $7.61 billion ($28.79 per diluted share), versus $6.83 billion ($23.16 per diluted share) in 2021.
- Net sales rose 14% to $41.51 billion, with steel products sales up 55% to $15.06 billion as average sales price per ton increased 54% in that segment.
- Steel products segment earnings before income taxes more than tripled to $4.09 billion, driven by joist and deck businesses.
- Steel mills segment earnings fell to $7.20 billion from $9.74 billion as sheet profitability declined and utilization fell to 77% from 94%.
- Cash and equivalents, short-term investments and restricted cash totaled $4.94 billion at year-end 2022; debt to total capital was about 25%; Baa1/A- ratings with stable outlooks.
- Cash provided by operating activities was $10.07 billion, versus $6.23 billion in 2021.
- Capital expenditures expected to be about $3.0 billion in 2023, including the Brandenburg, Kentucky plate mill and the Mason County, West Virginia sheet mill.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2022filed March 1, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $41.51B$36.48B | +13.8% |
| Cost of Revenue | $29.01B$25.46B | +13.9% |
| Gross Profit | $12.50B$11.03B | +13.4% |
| SG&A Expenses | $2.00B$1.71B | +17.0% |
| Interest Expense | $219.00M$163.12M | +34.3% |
| Net Income | $7.61B$6.83B | +11.4% |
| EPS (Basic) | $28.88$23.23 | +24.3% |
| EPS (Diluted) | $28.79$23.16 | +24.3% |
| Shares Outstanding (Basic) | 262.30M292.49M | −10.3% |
| Shares Outstanding (Diluted) | 263.20M293.39M | −10.3% |
05—Questions
Frequently Asked Questions
How did Nucor perform financially in 2022?
Nucor reported consolidated net earnings of $7.61 billion, or $28.79 per diluted share, the most profitable year in the company's history. Net sales increased 14% to $41.51 billion, and gross margins rose to $12.50 billion (30% of sales) from $11.03 billion (30%).
What drove the change in segment results?
The steel products segment, led by joist and deck businesses, set an earnings record as average selling prices rose sharply. The steel mills segment's earnings declined from its 2021 record because sheet mill profitability fell, utilization dropped to 77%, and conversion costs rose with inflation.
How is Nucor returning capital to stockholders?
Nucor repurchased $2.76 billion of common stock in 2022 and paid $2.00 per share in total dividends. The company intends to return at least 40% of net earnings to stockholders through dividends and buybacks, and about $1.09 billion remained available under its share repurchase authorization at December 31, 2022.
What major growth investments and acquisitions is Nucor pursuing?
Nucor is completing a plate mill in Brandenburg, Kentucky, expanding its Gallatin sheet mill, and building a new sheet mill in Mason County, West Virginia with an estimated net cash outlay of $3.1 billion. In 2022 it acquired C.H.I. Overhead Doors for approximately $3.00 billion and a 51% interest in California Steel Industries for about $400 million.
What is Nucor's outlook for early 2023?
Management expects steel mills profitability to increase in the first quarter of 2023 versus the fourth quarter of 2022, with the largest improvement at sheet mills, and expects continued strong steel products profitability. However, consolidated net earnings are expected to decline versus the fourth quarter due to intercompany eliminations and the absence of fourth-quarter state tax benefits.
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