Nucor earnings decline in Q3

Charlotte, North Carolina-based steelmaker and scrap recycler Nucor Corp. recorded $1.14 billion in net earnings in the third quarter of this year. Although the amount is considerable, its earnings dropped 21.9 percent compared with the $1.46 billion earned in the prior quarter and by 32.5 percent compared with the $1.69 billion earned in the third quarter of 2022. 

Year to date, Nucor’s $3.74 billion earned, or $14.83 per diluted share, compares with consolidated net earnings attributable to Nucor stockholders of $6.35 billion in the first three quarters of last year, or $23.85 per diluted share, representing a 41.1 percent decline from its 2022 record year.

“With $14.83 of earnings per diluted share for the first nine months of 2023, this already represents the third-best full-year result in Nucor’s history,” Nucor President and CEO Leon Topalian says.

“We believe that our world-class manufacturing team, product diversity, and our sustainable solutions set us up for continued success over the long term. The investments we are making to grow our core businesses and expand into new products continue to generate attractive returns for stockholders.”

Regarding its scrap and steel margin experience in the most recently completed quarter, Nucor says the average scrap and scrap substitute cost per gross ton it paid in the third quarter of 2023 was $415, a 9 percent decrease compared to $455 per ton paid in the second quarter of this year.

On its electric arc furnace (EAF) mill side, the company's total steel mill shipments in the third quarter decreased by 4 percent compared with the prior quarter while the average sales price per ton in the third quarter decreased 3 percent compared with the second quarter of this year

Earnings in all three of Nucor's operating units (steel mills, raw materials and fabrication) fell in this year’s third quarter compared with the prior quarter.

In its raw materials segment, which includes the David J. Joseph network of scrap yards, earnings decreased in the third quarter compared with the second quarter due to margin compression at our direct reduced iron, or DRI, facilities and scrap processing operations.

The raw materials segment has been a disappointing one for Nucor throughout the year. The company’s financial statement indicates that segment earned about $71.4 million in the first nine months of this year. That is a sizable 73.3 percent drop from the more than $279 million earned by Nucor’s raw materials segment in the first three quarters of last year.

Earnings in Nucor’s steel mills segment also declined, with the company saying it was “primarily due to lower pricing, and to a lesser extent, decreased volumes.”

Looking ahead, Nucor expects earnings in the current quarter to decrease compared with the third quarter of 2023 primarily because of lower pricing across all three operating segments, and, to a lesser extent, decreased volumes.

“Earnings for the raw materials segment are expected to decrease in the fourth quarter of 2023 as compared to the third quarter of 2023 due to lower pricing for raw materials and planned outages at our DRI facilities," Nucor says.

“In the steel mills segment, we expect the decrease in realized pricing to be most pronounced at our sheet mills. In the steel products segment, we expect decreased earnings due to moderating average selling prices at most of the product groups within the steel products segment, and lower volumes.”