Nucor CEO Discusses Q3 2010 Results - Earnings Call Transcript

Nucor CEO Discusses Q3 2010 Results - Earnings Call Transcript
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Nucor Corporation (



Q3 2010 Earnings Call Transcript

October 21, 2010 2:00 pm ET


Dan DiMicco – Chairman, President and CEO

Jim Frias – EVP, Treasurer and CFO

John Ferriola – COO, Steelmaking Operations

Hamilton Lott – EVP, Downstream Fabricated Products

Keith Grass – EVP, Scrap Operations

Jim Darsey – EVP, Bar Products Group

Ladd Hall – EVP, Flat Rolled Sheet Business


Timna Tanners – UBS

David Gagliano – Credit Suisse

Michael Gambardella – JPMorgan

Tony Rizzuto – Dahlman Rose

Mark Parr – KeyBanc Capital Markets

Brian Yu – Citi

Michael Willemse – CIBC

Michelle Applebaum – Michelle Applebaum Research

Sal Tharani – Goldman Sachs

Debra Fine – Fine Capital



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» Nucor Corporation Q3 2009 Earnings Call Transcript

Good day, and welcome to the Nucor Corporation third quarter 2010 earnings call. As a reminder, today’s call is being recorded. Later, we will conduct a question-and-answer session and instructions will come at that time.

Certain statements made during this conference call will be forward-looking statements that involve risks and uncertainties. The words we “expect,” “believe,” “anticipate,” and variations of such words and similar expressions are intended to identify those forward-looking statements, which are based on management’s current expectations and information that is currently available. Although Nucor believes they are based on reasonable assumptions, there can be no assurance that future events will not affect their accuracy.

More information about the risks and uncertainties relating to these forward-looking statements may be found on Nucor’s latest 10-K and subsequently filed 10-Qs, which are available on SEC’s and Nucor’s Web site. The forward-looking statements made in this conference call speak only as of this date, and Nucor does not assume any obligations to update them either as result of new information, future events or otherwise.

For opening remarks and introductions, I would like to turn the call over to Mr. Dan DiMicco, Chairman, President and Chief Executive Officer of Nucor Corporation. Please go ahead, sir.

Dan DiMicco

Thank you, John. Good afternoon and thank you for joining us for Nucor’s conference call. As always, we appreciate your interest in our company.

With me for today’s call are the other members of Nucor’s senior management team, Chief Financial Officer, Jim Frias; Chief Operating Officer of our Steelmaking Operations, John Ferriola; and Executive Vice Presidents, Jim Darsey of our Bar Products Group; Keith Grass of our Scrap Operations; Ladd Hall of our Flat Rolled Sheet business; Hamilton Lott of our Downstream Fabricated Products; and Joe Stratman, who heads up our Business Development team, as well as overseeing our Plate and Beam Operations. After a brief review of our third quarter results and our work growing Nucor’s long-term profitability, we’ll take your questions.

First, and as usual most importantly, I want to thank everyone in our team at Nucor and our Harris Steel and David J. Joseph operations for working safely continuing to battle through the tough times in the economy.

The talent and can-do attitude are the reasons Nucor will continue our long history of emerging from downturn stronger than we entered them, and when the good times whenever they will return, which they will, our work will pay big dividends to all members of Nucor family. Please stay safe and let’s continue doing it together.

Our third quarter earnings of $0.07 per diluted share were consistent with our guidance range of between $0.05 to $0.10 per share. Our results included a LIFO charge of $50 million were somewhat less than the estimated LIFO charge of $67 million incorporated into our guidance.

As we discussed in our last conference call in late July, and again in our mid-September guidance report, the third quarter was impacted by a general slowdown across all product lines. It is now painfully clear that the overall U.S. economy in recent months entered a new period of uncertainty and reduced economic activity. Historically, it takes GDP growth rates of over 3% for steel consumption to rise.

More than two years after the onset of this economic crisis, economy continues to stutter with less than 2% GDP growth, and with unemployment and underemployment struck at alarming levels. What is responsive to more than 20,000 men and women of Nucor, it feels extremely challenging environment to continue to work together, to prepare ourselves for inevitable return of better economic times.

We are not in a position to predict when the economy will return to strong levels, except to say that it will measured in years, not much. But as the economy strengthens over the next several years, we will be in a strong position to take advantage of it, and even better we will be positioned with increased long-term earnings power as a result of our investments made during the tough times. Downturns are nothing new to the Nucor team. Our company has a long history of using downturns as opportunities to grow stronger.

The strength of our culture, our balance sheet, and our business model enable us to do this. Our focus is always on the long term to build real and sustainable value for our shareholders, employees, and the people who buy and use our products. Nucor is doing this again in the current downturn.

One of the worst economic environments in our industry and in our country’s history. We’re doing this primary investing in both our operations and our people. To be more specific, Nucor expanding its product portfolio to better serve our customers. Nucor management is relentless in its focus on continuing improvement in quality and cost and safety.

Nucor is aggressively implementing a raw material strategy and Nucor is taking advantage of opportunities supported by strong balance sheet to lower its cost of capital to continue its current dividend program. Jim Frias, John Ferriola, and Ham Lott will update you on our third quarter progress in capitalizing our opportunities for Nucor to grow stronger.

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