The past week has been relatively good for U.S.-based steelmakers, with AK Steel Holding Corporation (NYSE:AKS), Steel Dynamics (NASDAQ:STLD), and United States Steel Corporation all reporting better-than-expected earnings results. The best of the bunch, Nucor Corporation (NYSE:NUE) reported its earnings on Jan. 28, reporting a surprise net loss that hid the company's solid operating performance.
There were a few key takeaways from this quarter's results, including Nucor's efforts to reduce the impact of imports on its business and how much better it has held up financially than almost all of its competitors.
The numbers
Fourth-quarter results:
Metric |
Q4 15 |
Q4 14 |
Change |
---|---|---|---|
Revenue |
$3,457 |
$5,004 |
(30.9%) |
Earnings Per Share |
($0.19) |
$0.66 |
(128.8%) |
Adjusted EPS |
$0.46 |
N/A |
|
.
I've added adjusted earnings per share to the table for some important context. Nucor's GAAP loss of $0.19 per share in the quarter was tied to $237.1 million in non-cash impairment charges the company took against its Italian joint partnership, Duferdofin Nucor, and writing down equipment at a Louisiana site that it won't use going forward.
Yes, it's not necessarily "good" that the company essentially wrote off $237 million in economic value related to those assets, but it demonstrates that the financial performance wasn't because of poor operations.
Full-year results:
Metric |
2015 |
2014 |
Change |
---|---|---|---|
Revenue |
$16,439 |
$21,105 |
(22.1%) |
Earnings per share |
$1.11 |
$2.22 |
(50%) |
Cash from operations |
$2,157 |
$1,343 |
60.6% |
REVENUE AND CASH FROM OPERATIONS IN MILLIONS. DATA SOURCE: COMPANY FILINGS.
I've added cash from operations to the full-year results.
Despite a significant decline in revenue and GAAP earnings, Nucor's operating performance remained solid for the year. It's worth noting that some changes in working capital -- i.e., short-term assets and liabilities on the balance sheet -- played a role as well, but it was largely a product of cost containment at Nucor, as well as a focus on moving upstream with value-added products.
Source: fool.com