Nucor Reports Results for Fourth Quarter and Year Ended 2019
Nucor Corporation announced consolidated net earnings of USD 107.8 million. For the full year 2019, Nucor reported consolidated net earnings of USD 1.27 billion as compared to USD 2.36 billion in 2018. Nucor's President and Chief Executive Officer Mr Leon Topalian said ""Stronger than expected steel mill segment performance in December was the primary driver for higher actual fourth quarter earnings than we indicated in our mid-December quantitative guidance. We believe that the inventory destocking that occurred throughout most of 2019 concluded in the fourth quarter, when customers resumed more normal buying patterns. Additionally, general business conditions improved in the fourth quarter due to a number of factors, including a rate cut by the Federal Reserve, the new labor agreement between the United Automobile Workers and GM, and definitive progress on the trade front. For the full year, strong performance in many of our steel products businesses partially offset the impact of destocking on our steelmaking operations. In particular, our Vulcraft/Verco and Building Systems groups both achieved record profitability in 2019, reflecting both strong execution by our teammates and favorable nonresidential construction market conditions. We are encouraged by recent economic trends and confident that our positive momentum will continue in 2020.”
Business and Operational Enhancements
On December 11, 2019, Nucor acquired TrueCore, LLC (TrueCore), an insulated metal panel manufacturing company with a facility in Laurens, South Carolina. TrueCore produces insulated metal panels that service the cold storage market, with future plans for additional commercial and industrial applications.
On December 18, 2019, Nucor announced that its board of directors approved an expansion project which will add a coil paint line at the company's sheet mill in Mississippi County, Arkansas. The new coil paint line will have a capacity of approximately 250,000 tons per year and is expected to start up in the first half of 2022, pending permit and regulatory approval.
First Quarter of 2020 Outlook “We expect Nucor's earnings in the first quarter of 2020 to increase as compared to the fourth quarter of 2019. We expect earnings in the steel mills segment to increase in the first quarter of 2020 as compared to the fourth quarter of 2019 (excluding the fourth quarter of 2019 impairment charge), due to the previously mentioned price increases and expected higher volumes. We expect a more stable pricing environment in 2020 after the severe inventory destocking that occurred in 2019. We expect the profitability of the steel products segment in the first quarter of 2020 to decrease as compared to the fourth quarter of 2019 (excluding the fourth quarter of 2019 impairment charges) due to normal seasonality. We expect the performance of the raw materials segment to increase in the first quarter of 2020 as compared to the fourth quarter of 2019, due to an improvement in pricing for raw materials, the absence of the impairment charge related to our proved producing natural gas well assets and no planned nonroutine outages at our Louisiana DRI plant.”
Source : Strategic Research Institute