Nucor reports 15% increase in net sales
We looked at the year-over-year growth in Nucor’s EPS in our last part. Let’s now analyze the other key metrics in Nucor’s 3Q results. The net sales in 3Q14 increased 15% over 3Q13. Steel shipments to outside customers increased 10% over 3Q13. The average selling prices also increased 5% over this period.
The above chart shows the increase in net sales at Nucor. As you can see, its sales have been rising over the past several quarters. Nucor’s consolidated net sales have increased 14% in the first nine months of 2014, as compared to the first nine months of 2013.
Downstream sales increase 18%
Nucor also has a downstream steel products division, as we discussed in the last part of this series. The shipments at its downstream operation increased 18% over the third quarter of 2013. The increase in shipments from steel mills was 7% over this period. This is a part of a conscious strategy by Nucor (NUE) to increase its downstream revenues.
Other steel companies like U.S. Steel (X), ArcelorMittal (MT), and AK Steel (AKS) have also been focusing on downstream operations. The value-added steel products from downstream operations generally sell at a higher price compared to generic steel products. This helps in increasing profit margins for steel companies.
Nucor reports higher costs in 3Q
In addition to Nucor’s third quarter sales growth, investors should also monitor the company’s cost structure. The raw material costs, as well as other expenses, have increased in 3Q, compared to last year. We’ll look at these increases in the next part of this series.
Investors can also access the diversified metals and mining industry through the SPDR S&P Metals and Mining ETF (XME).