Nucor Corp. Reports Operating Results (10-Q)

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Aug 11, 2010
Nucor Corp. (NUE, Financial) filed Quarterly Report for the period ended 2010-07-03.

Nucor Corp. has a market cap of $12.09 billion; its shares were traded at around $38.36 with a P/E ratio of 79.9 and P/S ratio of 1.1. The dividend yield of Nucor Corp. stocks is 3.7%.NUE is in the portfolios of Richard Snow of Snow Capital Management, L.P., Brian Rogers of T Rowe Price Equity Income Fund, Kenneth Fisher of Fisher Asset Management, LLC, Mark Hillman of Hillman Capital Management, John Buckingham of Al Frank Asset Management, Inc., Bruce Kovner of Caxton Associates, David Dreman of Dreman Value Management, NWQ Managers of NWQ Investment Management Co, Pioneer Investments, Chuck Royce of Royce& Associates, Richard Aster Jr of Meridian Fund, Jeremy Grantham of GMO LLC, Dodge & Cox, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

The average utilization rates of all operating facilities in the steel mills, steel products and raw materials segments were approximately 72%, 52% and 72%, respectively, in the first half of 2010, compared with 46%, 47% and 42%, respectively, in the first half of 2009.

The sales for the raw materials segment increased 81% from the second quarter of 2009 to the second quarter of 2010 and increased 75% from the first six months of 2009 to the first six months of 2010 primarily due to increased average sales price per ton and, to a lesser extent, to increased volume. In the second quarter of 2010, approximately 90% of outside sales in the raw materials segment were from the brokerage operations of DJJ and approximately 10% of the outside sales were from the scrap processing facilities (71% and 28%, respectively, in the second quarter of 2009). In the first half of 2010, approximately 89% of outside sales in the raw materials segment were from the brokerage operations of DJJ and approximately 11% of the outside sales were from the scrap processing facilities (73% and 26%, respectively, in the first half of 2009).

Gross Margins For the second quarter of 2010, Nucor recorded gross margins of $308.0 million (7%), compared to $(61.9) million (-2%) in the second quarter of 2009. The year-over-year dollar and gross margin percentage increases were the result of a 25% increase in the average sales price per ton and the 35% increase in total shipments to outside customers. Additionally, the increases were due to the following factors:

For the first half of 2010, Nucor recorded gross margins of $520.8 million (7%), compared to ($185.9) million (-4%) in the first half of 2009. The year-over-year dollar and gross margin percentage increases were the result of an 8% increase in the average sales price per ton and the 41% increase in total

Marketing, Administrative and Other Expenses Two major components of marketing, administrative and other expenses are freight and profit sharing costs. Although total freight costs increased 27% from the prior year quarter, unit freight costs increased only 2%. Total freight costs were increased 15% from the first six months of 2009, while unit freight costs increased 2%. Unit freight costs did not increase the same magnitude as total freight costs due to efficiencies created by increased shipments. Profit sharing costs, which are based upon and fluctuate with pre-tax earnings, increased over 2009 due to Nucors increased profitability. No profit sharing costs were incurred in the first half of 2009 due to Nucor reporting a consolidated net loss for the period.

Nucor reported consolidated net earnings of $122.0 million, or $0.38 per diluted share, in the first half of 2010, compared to a consolidated net loss of $323.0 million, or $1.03 per diluted share, in the first half of 2009. Net earnings (loss) attributable to Nucor stockholders as a percentage of net sales were 1.6% and (6.3%), respectively, in the first half of 2010 and 2009. Return on average stockholders equity was approximately 3.3% and (8.3%) in the first half of 2010 and 2009, respectively.

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