Nucor Corporation announced Thursday consolidated net earnings of $147.6 million, or $0.46 per diluted share, for the third quarter of 2013, compared to net earnings of $85.1 million, or $0.27 per diluted share, in the second quarter of 2013 and net earnings of $110.3 million, or $0.35 per diluted share, in the third quarter of 2012.
Third quarter of 2013 earnings were negatively affected by a net $14.0 million ($0.03 per diluted share) partial write down of inventory and fixed asset balances associated with the collapse of a storage dome at Nucor Steel Louisiana in St. James Parish on September 25, 2013. There were no injuries sustained, and there was no environmental impact. Nucor Steel Louisiana was finishing construction of its new direct reduced iron (DRI) plant on the site and preparing to begin production. The start-up of operations will now be delayed until the end of the year.
Nucor's consolidated net sales increased 6 percent to $4.94 billion in the third quarter of 2013 compared with $4.67 billion in the second quarter of 2013 and increased 3 percent compared with $4.80 billion in the third quarter of 2012. Average sales price per ton increased slightly from the second quarter of 2013 and decreased 4 percent from the third quarter of 2012. Total tons shipped to outside customers were 6,166,000 tons in the third quarter of 2013, a 6 percent increase over the second quarter of 2013 and a 7 percent increase over the third quarter of 2012. Total third quarter steel mill shipments increased 6 percent over the third quarter of 2012 and increased 7 percent from the second quarter of 2013. Third quarter downstream steel products shipments to outside customers decreased 4 percent from the third quarter of 2012 and increased 2 percent over the second quarter of 2013.
The average scrap and scrap substitute cost per ton used in the third quarter of 2013 was $372, a decrease of 1 percent from $377 in the second quarter of 2013 and a decrease of 2 percent from $380 in the third quarter of 2012. The average scrap and scrap substitute cost per ton used in the first nine months of 2013 was $376, a decrease of 10 percent from $418 in the first nine months of 2012.
Overall operating rates at Nucor's steel mills in the third quarter (78 percent) were up from the second quarter (73 percent) and from last year's third quarter (71 percent).
The company reported that third quarter operating performance in the steel mills segment improved significantly compared with second quarter performance mainly due to better pricing for sheet steel. Sheet steel profitability improved as a result of competitor supply disruptions, customer inventory restocking and some market demand improvement. Structural steel profitability also improved due to Nucor-Yamato Steel's higher production following its 17 day planned outage during the second quarter and customer inventory restocking. Additionally, the fabricated construction products businesses (rebar fabrication, joist and decking, and pre-engineered metal buildings) have had operating profits in five of the last six quarters.
Although Nucor expects stability in metal margins, the company said that it typically experiences lower shipping volumes in the fourth quarter due to seasonal factors. Additionally, it expects extended planned outages during the fourth quarter at the SBQ mill in Norfolk, Nebraska, the sheet mill in Berkeley County, South Carolina, and the structural mill in Blytheville, Arkansas in preparation for a previously announced capital expansion projects at those facilities. As a result, Nucor currently expects to see moderately lower earnings for the fourth quarter of 2013.