01—Abstract
Summary
Summary of the 10-Q filed November 6, 2024. Cited figures are marked; the original filing is the authoritative source.
Nucor Corporation's Form 10-Q for the quarter ended September 28, 2024 shows a sharp earnings decline.
Net sales for the third quarter were $7.44 billiona, down from $8.78 billion a year earlier, and net earnings attributable to Nucor stockholders were $249.9 million, or $1.05 per diluted share, versus $1.14 billion, or $4.57 per diluted share, in the third quarter of 2023. The filing attributes the decline mainly to lower metal margins in the steel mills segment as average selling prices fell, and to weaker joist and deck businesses in the steel products segment. The quarter also included $123.0 million of losses and impairments of assets, including an $83.0 million impairment that fully reserved a long-term note receivable in the raw materials segment.
For the first nine months, net sales were $23.66 billionb and net earnings attributable to Nucor stockholders were $1.74 billion, or $7.22 per diluted share. Balance sheet liquidity declined over the period. Cash and cash equivalents fell to $4.26 billion from $6.38 billion at December 31, 2023, and capital expenditures rose to $2.29 billion in the first nine months, driven by sheet mill and rebar micro mill projects.
Nucor used $1.90 billionc for share repurchases and $393.8 million for cash dividends in the nine-month period. Management expects fourth-quarter earnings per diluted share to decrease from the third-quarter level, citing lower average selling prices and volumes in the steel mills and steel products segments, while raw materials earnings are expected to increase excluding the third-quarter impairment. Nucor acquired Rytec Corporation, a high-performance overhead door manufacturer, for approximately $565 million in July 2024.
The company's revolving credit facility of $1.75 billiond remained undrawn, with a funded debt to total capital ratio of 24.4%. Management stated that it believes funds from operations and existing cash and credit facilities will be adequate for at least the next 24 months.
02—Key points
Key Highlights
- Third-quarter 2024 net earnings attributable to Nucor stockholders were $249.9 million, or $1.05 per diluted share, compared with $1.14 billion, or $4.57 per diluted share, in the third quarter of 2023.
- Third-quarter net sales were $7.44 billion, down 15% from $8.78 billion, with average sales price per ton decreasing 15% to $1,201.
- The quarter included $123.0 million of losses and impairments of assets, of which $83.0 million fully reserved a long-term note receivable in the raw materials segment.
- Cash provided by operating activities was $3.25 billion for the first nine months of 2024, compared with $5.59 billion in the same period of 2023.
- Capital expenditures were $2.29 billion in the first nine months, and 2024 capital expenditures are estimated at approximately $3.2 billion.
- Nucor acquired Rytec Corporation for approximately $565 million in July 2024, with goodwill of $274.0 million allocated to the steel products segment.
- Management expects fourth-quarter 2024 earnings per diluted share to decrease from the $1.05 reported for the third quarter, driven by the steel mills segment.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed November 6, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $7.44B$9.52B | −21.8% |
| Cost of Revenue | $6.69B$6.85B | −2.5% |
| Gross Profit | $758.00M$2.50B | −69.7% |
| SG&A Expenses | $244.00M$385.77M | −36.7% |
| Interest Expense | $65.00M$63.23M | +2.8% |
| Net Income | $250.00M$1.46B | −82.9% |
| EPS (Basic) | $1.05$5.82 | −82.0% |
| EPS (Diluted) | $1.05$5.81 | −81.9% |
| Shares Outstanding (Basic) | 236.50M248.50M | −4.8% |
| Shares Outstanding (Diluted) | 236.80M248.92M | −4.9% |
05—Questions
Frequently Asked Questions
Why did Nucor's earnings fall so sharply in the third quarter of 2024?
The largest driver was lower metal margins in the steel mills segment, as average selling prices decreased across all product groups and outpaced the decline in scrap costs. The steel products segment also declined significantly, mainly due to lower average selling prices and volumes in its joist and deck businesses. The quarter also included $123.0 million of losses and impairments of assets.
What did the $123.0 million of losses and impairments relate to?
Management determined it was probable that a long-term note receivable in the raw materials segment was no longer collectible and recorded an $83.0 million impairment to fully reserve it. The remaining $40.0 million related mostly to property, plant and equipment at a business in the steel products segment.
What is the outlook for the fourth quarter of 2024?
Nucor expects consolidated net earnings attributable to Nucor stockholders in the fourth quarter to decrease compared with the $1.05 per diluted share reported for the third quarter. Steel mills and steel products earnings are expected to decline on lower average selling prices and volumes, while raw materials earnings are expected to increase, excluding the third-quarter impairment.
How is Nucor's liquidity and capital allocation changing?
Cash and cash equivalents fell to $4.26 billion from $6.38 billion at December 31, 2023, as operating cash flow of $3.25 billion did not cover capital expenditures of $2.29 billion, acquisitions of $672.2 million, share repurchases of $1.90 billion and dividends of $393.8 million. The $1.75 billion revolving credit facility was undrawn, and the funded debt to total capital ratio was 24.4%.
Does the filing mention any material legal exposure?
Nucor reported that it does not believe any of its lawsuits or proceedings would have a material adverse effect. It disclosed that a combined settlement is being negotiated with the Department of Justice, the EPA and the Louisiana Department of Environmental Quality over Clean Air Act allegations at its Nucor Steel Louisiana DRI facility, and that it does not believe any aggregate settlement would be material.
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