Nucor nets $1.46B in Q2 2023

Charlotte, North Carolina-based Nucor Corp., the largest steel mill consumer of ferrous scrap in the U.S., earned $1.46 billon in this year’s second quarter, representing a 28 percent increase from the prior quarter’s $1.14 billion but a 43 percent drop in earnings from one year ago.

Year to date, the company has earned an impressive $2.6 billion, though the figure represents a 44.2 percent decline from $4.66 billion of net income in the first six months of last year.

Nucor President and CEO Leon Topalian overall has upbeat comments to make about the steelmaker’s profitable 2023 first half. “The investments we’ve made in recent years to grow our core and expand into new markets are generating strong returns for stockholders and further position Nucor as a highly efficient industrial manufacturer,” he says.

“Through June, we are on pace to set another safety record for the fifth consecutive year.  And with $10.26 of earnings per diluted share in the first half of 2023, this represents the second-strongest start to any fiscal year in Nucor history. “

Looking at the remainder of the year, Topalian says, “We expect earnings in the third quarter of 2023 to decrease compared to the second quarter of 2023. We expect earnings for the steel mills segment to decline in the third quarter [due] to decreased profitability, with the largest impact at our sheet mills.”

Of the company’s Raw Materials business unit, which includes the David J. Joseph network of scrap yards, he adds, “Earnings for the raw materials segment are expected to decrease in the third quarter of 2023 as compared to the second quarter of 2023 due to margin compression at our direct reduced iron [DRI] facilities and scrap processing operations.”

Those same DRI plants offered positive results in the first half of the year, with the company citing improved profitability in this year’s second quarter compared with the first.

Lower scrap and DRI profits, however, can be welcome news within the firm’s larger Steel Mill segment. The company's average scrap and scrap substitute cost per gross ton used in the first six months of 2023 was $435, a 16 percent decrease compared with $516 in the first six months of last year.

Nucor says overall operating rates at its mills increased to 84 percent in the second quarter of 2023 compared with 79 percent the prior quarter and nearly level with the 85 percent rate from last year’s second quarter.

Also affecting Nucor’s balance sheet in 2023 are “preoperating and startup costs related to the company's growth projects,” which it calculates at $90 million in the quarter just completed, compared with approximately $82 million the previous quarter and just $60 million one year ago.