OREANDA-NEWS. April 30, 2014. Nucor Corporation (NYSE: NUE) announced consolidated net earnings of USD111.0 million, or USD 0.35 per diluted share, for the first quarter of 2014. By comparison, Nucor reported net earnings of USD 84.8 million, or USD 0.26 per diluted share, for the first quarter of 2013 and net earnings of USD 170.5 million, or USD 0.53 per diluted share, in the fourth quarter of 2013. 

Nucor incurred a charge to value inventories using the last-in, first-out (LIFO) method of accounting of USD 14.5 million (USD 0.03 per diluted share) in the first quarter of 2014, compared with a charge of USD 18.0 million (USD 0.03 per diluted share) in the first quarter of 2013 and a charge of USD 17.4 million (USD 0.04 per diluted share) in the fourth quarter of 2013. Included in the first quarter of 2014 earnings was a USD 12.8 million (USD 0.04 per diluted share) charge primarily related to tax legislation changes in the state of New York.  Also included in first quarter results is a USD 9.0 million charge (USD 0.02 per diluted share) related to the disposal of assets within the steel mills segment.  Earnings in the fourth quarter of 2013 were impacted by an out-of-period non-cash gain of USD 21.3 million (USD 0.07 per diluted share) related to a correction to deferred tax balances. 

Nucor's consolidated net sales increased 12% to USD 5.11 billion in the first quarter of 2014 from USD 4.55 billion in the first quarter of 2013 and increased 4% compared with USD 4.89 billion in the fourth quarter of 2013.  Average sales price per ton increased 3% over the first quarter of 2013 and increased 1% over the fourth quarter of 2013. Total tons shipped to outside customers were 6,189,000 tons in the first quarter of 2014, an 8% increase over the first quarter of 2013 and a 3% increase over the fourth quarter of 2013, despite severe weather conditions. 

Total first quarter steel mill shipments increased 5%  from the fourth  quarter of 2013 and increased 7% over the first quarter of 2013.  First quarter downstream steel products shipments to outside customers decreased 1% from the fourth quarter of 2013 and increased 13% over the first quarter of 2013.

The average scrap and scrap substitute cost per ton used during the first quarter of 2014 was USD 398, an increase of 5% from USD 379 in the first quarter of 2013 and an increase of 6% compared to USD 377 in the fourth quarter of 2013.   

Overall operating rates at our steel mills increased to 75% in the first quarter of 2014 as compared to 72% in the first quarter of 2013 and were the same as the fourth quarter of 2013.

Total steel mill energy costs in the first quarter of 2014 increased approximately USD 5 per ton compared to the first quarter of 2013 and USD 7 per ton compared to the fourth quarter of 2013. The increases were attributable to increased natural gas and electricity unit costs.

Our liquidity position remains strong with USD 1.25 billion in cash and cash equivalents and short-term investments and an untapped USD 1.5 billion revolving credit facility that does not expire until August 2018.

We continue to be pleased with the progress of our new direct reduced iron (DRI) plant in St. James Parish, Louisiana. In the first quarter of 2014, the Louisiana DRI plant produced 455,000 tons with peak operating rates exceeding 90% of the name plate capacity while achieving world-class metallization and carbon percentages.   

In February, Nucor's board of directors declared a cash dividend of USD 0.37 per share payable on May 12, 2014 to stockholders of record on March 31, 2014.  This dividend is Nucor's 164th consecutive quarterly cash dividend, a record we expect to continue.

In March, a jury in a federal district court in Houston, Texas, returned a verdict against Nucor and five other co-defendants in an antitrust litigation brought by plaintiff MM Steel, LP, a steel plate service center located in Houston. The jury returned a verdict of USD 52 million in damages against all defendants jointly and severally. This amount is subject to trebling under the federal antitrust laws. The portion of damages, if any, that Nucor may be required to pay is unknown at this time. Nucor will continue to pursue all available post-trial motions and appeals to seek to have the verdict overturned. We continue to believe that MM Steel, LP's claims against Nucor are meritless and that Nucor acted entirely within its legal rights. Accordingly, we have not recorded a charge related to this case.

As expected, first quarter of 2014 earnings, excluding the impact of the tax and disposal of assets charges in the first quarter of 2014, were below the fourth quarter of 2013 levels, excluding the out-of-period tax adjustment in the fourth quarter of 2013. The largest factor contributing to this decrease was severe weather conditions, which disrupted customer demand, decreased the amount of railcar availability, contributed to increased energy costs at our steel mills and exacerbated conditions in the seasonally weaker performance of our fabricated construction products businesses.  Additionally, import levels negatively impacted pricing and margins at our bar and sheet mills.  Our operating performance did benefit from having no major extended planned outages at our steel mills during the first quarter.

We currently expect some improvement in second quarter of 2014 earnings from the first quarter of 2014, excluding the impact of the tax and disposal of assets charges incurred in the first quarter. We anticipate improved performance at both our steel mills and fabricated construction product businesses (rebar fabrication, joist and decking and pre-engineered metal buildings), although imports are expected to continue to pressure pricing and margins at our steel mills. We remain cautiously optimistic about the small but noticeable improvement in the nonresidential construction markets in 2014. 

Nucor and affiliates are manufacturers of steel products, with operating facilities primarily in the U.S. and Canada. Products produced include: carbon and alloy steel -- in bars, beams, sheet and plate; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; steel grating and expanded metal; and wire and wire mesh. Nucor, through The David J. Joseph Company, also brokers ferrous and nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America's largest recycler.