Nucor joins SDI with reduced but substantial profits

Nucor Corp. has announced achieving a net earnings of $1.69 billion in the third quarter of this year. As substantial as that amount sounds, it is down 34 percent from the $2.56 billion of earnings the scrap-fed electric arc furnace (EAF) steelmaker netted in the prior financial quarter.

The Nucor results announcement closely follows that of fellow EAF steelmaker Steel Dynamics Inc. (SDI). That Indiana-based firm announced third quarter earnings per share that were about 22 percent lower compared with its second quarter 2022 earnings.

Year to date in 2022, Nucor, based in Charlotte, North Carolina, has reported consolidated net earnings of $6.35 billion, or $23.85 per diluted share. That represents a 38 percent rise compared with consolidated net earnings of $4.58 billion, or $15.34 per diluted share, in the first nine months of 2021.

“Nucor has already achieved a record-breaking year for earnings per share through the first nine months of 202, and we continue to believe that we will set a new record for full-year earnings in 2022,” Nucor President and CEO Leon Topalian says.

“While economic uncertainty and inflation continue to put pressure across a myriad of sectors in the United States, we believe the medium- and long-term outlook and fundamentals in our industry remain positive,” Topalian adds. “We believe our growth investments and acquisitions continue to position Nucor to meet and exceed our customers’ and shareholders’ expectations today and well into the future.”

Nucor says the average price its mills paid for ferrous scrap and scrap substitutes consumed in the third quarter of 2022 was $502, which it calls a 6 percent decrease compared with $534 per ton in the second quarter of 2022 and a 2 percent decrease compared to $511 in the third quarter of 2021.

Year to date, Nucor says its average price paid for scrap and scrap substitutes used in the first nine months was $511 per ton, a 12 percent increase compared to $457 per ton paid in the first nine months of 2021.

In the third quarter, Nucor says its scrap brokerage and processing operations experienced a tougher environment compared with the prior quarter, but its direct reduced iron (DIR) operations were more profitable.

Looking ahead to the year’s final quarter, the company sees another reduction in profits looming.  “In the steel mills segment, we expect considerably lower earnings in the fourth quarter of 2022 as compared to the third quarter of 2022 due to lower average selling prices and lower volumes, with the largest decrease in profitability expected at our sheet mills,” Nucor writes in comments accompanying its results.

The company adds, “The raw materials segment is expected to have significantly decreased earnings in the fourth quarter of 2022 as compared to the third quarter of 2022 due to decreased selling prices for raw materials.”