01—Abstract
Summary
Summary of the 10-Q filed August 7, 2024. Cited figures are marked; the original filing is the authoritative source.
Nucor Corporation's Form 10-Q for the quarter ended June 29, 2024 shows a sharp earnings decline.
Net sales for the second quarter fell to $8.08 billiona from $9.52 billion a year earlier, and net earnings attributable to Nucor stockholders dropped to $645.2 million, or $2.68 per diluted share, from $1.46 billion, or $5.81 per diluted share. For the first six months, net earnings attributable to Nucor stockholders were $1.49 billion, or $6.14 per diluted share, versus $2.60 billion, or $10.26 per diluted share. Management attributes the decline mainly to lower average selling prices and lower volumes in the steel mills segment, and to lower selling prices for joists and deck in the steel products segment.
Management expects third-quarter 2024 earnings to decrease from the second quarter, citing lower steel mills and steel products selling prices, and notes increased imports and a "higher for longer" interest rate environment. Balance sheet and cash flow remained solid but weaker. Cash and cash equivalents plus short-term investments totaled $5.43 billionb at June 29, 2024, down from $7.13 billion at December 31, 2023.
Cash from operations was $1.94 billionc for the first six months, compared with $3.13 billion a year earlier. Capital expenditures rose to $1.47 billion, and management estimates full-year 2024 capital expenditures of approximately $3.50 billion. Stock repurchases totaled $1.50 billion in the first six months, and about $1.82 billion remained available under the repurchase authorization.
The company reported a funded debt to total capital ratio of 24.0% and no borrowings under its $1.75 billiond revolving credit facility. Subsequent to the quarter, on July 23, 2024, Nucor acquired Rytec Corporation, a door manufacturer, for a cash purchase price of approximately $565 million, to be included in the steel products segment.
02—Key points
Key Highlights
- Net sales fell 15% in the second quarter to $8.08 billion, and 11% in the first six months to $16.21 billion, driven by lower average selling prices and shipment volumes.
- Net earnings attributable to Nucor stockholders were $645.2 million ($2.68 per diluted share) in Q2 2024, down from $1.46 billion ($5.81 per diluted share) in Q2 2023.
- The steel mills segment saw the largest earnings decline, with pre-tax earnings of $645.3 million in Q2 2024 versus $1.40 billion a year earlier, and lower average selling prices at sheet and bar mills.
- Steel products earnings fell sharply as joist and deck selling prices moderated from historically high levels; pre-tax earnings were $441.4 million in Q2 2024 versus $1.01 billion.
- Management guides to lower third-quarter 2024 earnings, citing lower average selling prices in steel mills and steel products and weaker raw materials earnings.
- Cash from operations fell to $1.94 billion in the first six months from $3.13 billion, while capital expenditures rose to $1.47 billion and full-year 2024 capex is estimated at about $3.50 billion.
- Nucor acquired Rytec Corporation on July 23, 2024 for approximately $565 million in cash, expanding into downstream commercial door products.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 7, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $8.08B$8.71B | −7.3% |
| Cost of Revenue | $6.88B$6.71B | +2.6% |
| Gross Profit | $1.19B$2.00B | −40.2% |
| SG&A Expenses | $294.00M$389.89M | −24.6% |
| Interest Expense | $67.00M$62.68M | +6.9% |
| Net Income | $645.00M$1.14B | −43.3% |
| EPS (Basic) | $2.68$4.47 | −40.0% |
| EPS (Diluted) | $2.68$4.45 | −39.8% |
| Shares Outstanding (Basic) | 239.60M253.61M | −5.5% |
| Shares Outstanding (Diluted) | 240.00M254.40M | −5.7% |
05—Questions
Frequently Asked Questions
Why did Nucor's earnings decline so much in the second quarter of 2024?
The filing attributes the decline mainly to lower average selling prices and decreased volumes in the steel mills segment, particularly at sheet and bar mills, and to lower joist and deck selling prices in the steel products segment. Lower metal margins across steel mills also reduced gross margin to $1.19 billion (15%) from $2.50 billion (26%) a year earlier.
What does Nucor expect for the third quarter of 2024?
Management expects earnings in the third quarter of 2024 to decrease compared with the second quarter, mainly due to lower average selling prices in the steel mills segment. Earnings in steel products and raw materials are also expected to decline. Management also expects scrap prices to decrease compared with the second quarter.
How is Nucor's liquidity and balance sheet position?
Cash, cash equivalents and short-term investments totaled $5.43 billion at June 29, 2024, down from $7.13 billion at year-end 2023. The current ratio was 2.9, and the funded debt to total capital ratio was 24.0%. No borrowings were outstanding under the $1.75 billion revolving credit facility, which matures November 5, 2026.
How much has Nucor returned to shareholders?
In the first six months of 2024, Nucor repurchased $1.50 billion of stock and paid $264.4 million in cash dividends. The Board declared a quarterly dividend of $0.54 per share payable August 9, 2024, its 205th consecutive quarterly dividend. About $1.82 billion remained available under the share repurchase authorization as of June 29, 2024.
What was the significant event after the quarter ended?
On July 23, 2024, Nucor acquired Rytec Corporation, a manufacturer of high-speed, high-performance commercial doors with two facilities in Wisconsin, for a cash purchase price of approximately $565 million. Nucor said the deal expands its strategy into related downstream businesses, and Rytec will be part of the steel products segment.
06—Continue