Nucor posts record profits in 2018

Charlotte, North Carolina-based Nucor Corp. has reported net earnings of $2.36 billion for its fiscal year 2018, which coincides with the calendar year. The steelmaker says its “record earnings per diluted share of $7.42 is 24 percent higher than previous record earnings of $5.98 per diluted share reported in 2008.”

The earnings figure also is up by 78.8 percent compared with $1.32 billion achieved in 2017.

“The best way to sum up 2018 is this: It was a record year for Nucor,” states John Ferriola, the company’s chairman, CEO and president.

Continues Ferriola, “We posted record earnings per share and record revenue, and we shipped a record amount of steel. Over the past decade, we have been positioning Nucor to take full advantage of an upturn in the steel market. During that time, we invested more than $9 billion to increase the company’s peak earnings power. These investments enhanced our competitive strengths by building on our product diversity and market leadership positions. Our 2018 financial results demonstrate that Nucor's disciplined strategy of investing for profitable growth is working.”

The Jan. 29 Nucor news release summarizing its annual results did not specifically mention the contribution of its scrap processing subsidiary, the David J. Joseph Co. (DJJ), Cincinnati.

In terms of raw materials, the company says, “The average scrap and scrap substitute cost per gross ton used for the full year 2018 was $361, an 18 percent increase from $307 for the full year 2017. The raw materials segment’s performance decreased in the fourth quarter of 2018 as compared to the third quarter of 2018 due to decreased earnings of our DRI (direct reduced iron) businesses.”

The earnings summary of Nucor’s Raw Materials segment shows it contributed $236.2 million in net earnings in 2018, an 82.7 increase of percent from the $129.3 million earned in 2017—an even greater increase than the overall corporate average.

For 2018, Nucor says its consolidated net sales increased 24 percent to $25 billion compared with $20.25 billion for 2017. In 2018, the company posted the highest consolidated sales in the company’s history, surpassing Nucor's previous record by 6 percent, according to the firm.

Momentum may have slowed in the fourth quarter, however, with Nucor’s consolidated net sales decreasing 7 percent to $6.3 billion in the fourth quarter of 2018 compared with $6.74 billion in the third quarter of 2018.

Overall operating rates at the company’ steel mills decreased to 88 percent in the fourth quarter of 2018 compared with 92 percent in the previous quarter Steel mill operating rates for the full year 2018 increased to 91 percent, however, compared with 86 percent for the full year 2017.

Looking forward, the company says it remains on track to build a steel plate mill in the U.S. Midwest. Nucor’s board of directors approved an investment of $1.35 billion to build the mill, which is expected to be fully operational in 2022 and will be capable of producing approximately 1.2 million tons per year of steel plate products. The site for the new mill is anticipated to be selected early in 2019.

Regarding its outlook for 2019, the company states, “We believe that 2019 will be another strong year, as we expect the earnings performance to be one of the best in Nucor’s history. As we enter 2019, we have a positive outlook on end-use demand and general economic conditions. The performance of the raw materials segment is expected to decrease in the first quarter of 2019 as compared with the fourth quarter of 2018 due to the decreased performance of our DRI (direct-reduced iron) businesses, which continue to be negatively impacted by declining average selling prices for raw materials that began in the fourth quarter of 2018.”