Steel Companies Ring in Strong Numbers

The steel industry is off to a good start, with two of the leading minimill operations - Nucor Corp and Steel Dynamics - both reporting strong numbers for the quarter, as well as first three nine months of the year.

Nucor Reports Strong Numbers for Quarter, First Nine Months

Nucor Corp. reported record consolidated net earnings for the first nine months of 2006 were $1.35 billion, a 39 percent increase of 39 percent over net earnings of $969.3 million in last year's first nine months. Consolidated net earnings of $517.6 million for the recently concluded quarter was a 77 percent compared with $291.9 million earned in the third quarter of 2005 and increased 14 percent from the $452.8 million earned in the second quarter of 2006.

Through the first nine months of the year Nucor's consolidated net sales increased 19 percent to $11.28 billion, compared with $9.49 billion in last year's first nine months. Average sales price per ton increased 7 percent while tons shipped to outside customers increased 11 percent from the first nine months of 2005. In the third quarter, Nucor's net sales increased 30 percent to $3.93 billion, compared with $3.03 billion in the third quarter of 2005 and increased 3 percent compared with $3.81 billion in the second quarter of 2006.

Average sales price per ton increased 23 percent from the third quarter of 2005 and increased 7 percent from the second quarter of 2006. Total tons shipped to outside customers were 5.6 million tons in the third quarter of 2006, an increase of 6 percent over the third quarter of 2005 and a decrease of 4 percent from the second quarter of 2006.

The average scrap and scrap substitute cost per ton used increased 1 percent from $245 in the first nine months of 2005 to $247 in the first nine months of 2006, increased 18 percent from $217 in the third quarter of 2005 to $257 in the third quarter of 2006, and increased 4 percent from $247 in the second quarter of 2006. Total energy costs increased about $1 per ton from the first nine months of 2005 to the first nine months of 2006, decreased about $4 per ton from the third quarter of 2005 to the third quarter of 2006, and increased about $3 per ton from the second quarter of 2006 to the third quarter of 2006.

In the steel mills segment, steel production increased 14 percent to 17,318,000 tons the first nine month, compared with 15,136,000 tons produced the same time last year. Total steel shipments increased 11 percent to 17,286,000 tons the first nine months, compared with 15,504,000 tons the same time last year. Steel shipments to outside customers increased 11 percent to 15,936,000 tons in the first nine months of 2006, compared with 14,295,000 tons in last year's first nine months. In the steel products segment, steel joist production during the first nine months of 2006 increased to 433,000 tons, compared with 413,000 tons in the first nine months of 2005. Steel deck sales decreased to 284,000 tons in the first nine months of 2006, compared with 285,000 tons in last year's first nine months. Cold finished steel sales remained flat at 261,000 tons when compared with the first nine months of 2005.

Steel Dynamics Sets Sales and Earnings Records for Third Quarter

Steel Dynamics, Inc. announced record third quarter earnings of $119 million. Net sales for the third quarter were a record $912 million, an increase of 11 percent from the second quarter of 2006 and 83 percent higher than the third quarter of 2005. Net income of $119 million increased 23 percent from $97 million in the second quarter of 2006 and 161 percent from $45 million in the third quarter of 2005. Net income for the first nine months of 2006 was $292 million, 86 percent higher than the first nine months of 2005.

Third quarter consolidated shipments of 1.2 million tons were 35 percent higher than the third quarter of 2005. Year-to-date consolidated shipments of 3.5 million tons were 32 percent higher than the first nine months of 2005.

"The third quarter was an excellent quarter, setting company records for revenue and earnings," said Keith Busse, president and CEO of Steel Dynamics. "Three of our steel-making divisions, Structural and Rail, Engineered Bar Products, and the Roanoke Bar division, set new tonnage shipping records in the third quarter. Overall, steel markets remained relatively strong with scrap costs increasing slightly during the quarter. Compared to the second quarter, our average consolidated selling price in the third quarter increased $61 per ton shipped, from $672 to $733 per ton. Average scrap costs were up $6 per net ton charged. Third quarter operating profit per ton shipped was $160.