Charlotte, N.C.-based
Nucor Corporation reported Tuesday net earnings of $58.9 million for the fourth quarter of 2009, compared with a net income of $105.9 million for the same quarter in 2008.
Net sales in Q4 were $2.94 billion, a six percent decrease from Q3, and a 29 percent decrease from the fourth quarter of 2008.
Nucor shipped 4,638,000 net tons in the 2009 fourth quarter, down nine percent from the 2009 third quarter, but up eight percent from Q4 in 2008.
For the full year of 2009,
Nucor reported a consolidated net loss of $293.6 million, compared with net earnings of $1.83 billion in 2008. The year-end consolidated net sales totaled $11.19 billion, a 53 percent decrease from $23.66 billion in 2008. Average sales price per net ton decreased 32 percent, while total net tons shipped decreased 30 percent from 2008 levels.
Nucor explained that fourth quarter results for 2009 were significantly impacted by reduced earnings in its downstream, long products and
scrap businesses. However, the sheet mills benefited from the absence of high-cost
pig iron inventories. The average cost per net ton for
scrap and
scrap substitute decreased by eight percent from Q3, and by 37 percent from the 2008 fourth quarter. For the full year of 2009, cost per net not decreased 31 percent from 2008.
Nucor recorded a credit to value inventories, using LIFO, of $116.9 million, compared with a credit of $120 million in 2009’s third quarter and a credit of $81.2 million in 2008’s fourth quarter. For the full year of 2009, the LIFO credit was $466.9 million, compared with a charge of $341.8 million in 2008.
Overall steel mill utilization decreased from 69 percent in the third quarter of 2009 to 58 percent in the fourth quarter of 2009, and increased from 48 percent in Q4 of 2008. Steel mill utilization rates decreased from 80 percent for the full year of 2008 to 54 percent for the full year 2009. The quarter-over-quarter decrease in utilization was due to fourth quarter seasonal issues unrelated to the general economic slowdown, such as holidays and year-end plant shutdowns.
Total energy costs in the fourth quarter of 2009 increased approximately $3 per net ton from the third quarter of 2009 due to higher natural gas prices and reduced productivity. Total energy costs decreased approximately $5 per ton from the fourth quarter of 2008 to the fourth quarter of 2009. For the full year 2009, total energy costs increased approximately $1 per ton from 2008.
Pre-operating and start-up costs of new facilities decreased from $53.8 million in the fourth quarter of 2008 to $48.1 million in the fourth quarter of 2009. The annual cost increased from $128.6 million in 2008 to $160 million in 2009, primarily related to the SBQ mill in Memphis, Tenn., the CastripR project in Blytheville, Ark., the proposed iron-making facility, and the galvanizing line in Decatur, Ala.
Going forward, the company believes that the most challenging markets for its products will be those associated with residential and non-residential construction. The company expects improvements of approximately five percent in steel mill shipments in the first quarter of 2010, and also significant increases in both sales prices and
scrap costs.