Nucor, SDI Issue Record Earnings Guidance; USS Strong Too

Flat roll operations led profitability for the company and second-quarter shipments are on track to achieve record quarterly volume. Robust order entry and historically low flat roll steel inventories continue to drive higher steel prices—a momentum that SDI believes will continue in Q3 for even stronger third-quarter results.

SDI’s recycling business in the second quarter is expected to be similar to strong first-quarter results based on steady shipments and increased pricing.

Record order backlogs and forward pricing for the company’s steel fabrication platform promise significantly higher quarterly results. Record shipments in Q2 and higher prices for products will more than offset higher steel input costs, said SDI.

Nucor Sets Earnings Record

Nucor expects the highest quarterly earnings in its history, forecasting second-quarter earnings in the range of $4.60 to $4.70 per diluted share, surpassing Q1’s record of $3.10 per diluted share. Included in the earnings projection is a $42 million non-cash impairment charge related to the company’s unproved oil and natural gas properties.

Significant profit growth at Nucor’s sheet and plate mills drove earnings for the steel mill segment. Earnings for the steel products segment are expected to surpass first quarter.

Nucor’s raw material segment is expected to show some softening from record earnings in the first quarter.

Nucor expects overall strong demand and higher steel prices to continue to support profit growth in the third quarter.

U.S. Steel Sees Green

U.S. Steel expects second-quarter adjusted net EBITDA of $1.2 billion, adjusted net income of $880 million, and adjusted earnings per share of approximately $3.08 million.

“Continued strong demand and low steel inventories are empowering today’s ongoing market improvements. These market fundamentals are showing no signs of slowing down and have us increasingly confident of another strong year in 2022,” U.S. Steel President and CEO David B. Burritt said in a statement.

The Pittsburgh-based steelmaker’s flat-rolled division is expected to benefit from higher steel prices in adjustable-price contracts as well as in spot transactions. Its minimill segment – namely, Big River Steel – should see increased gains not only from higher prices but also from efficiencies gained thanks to the Osceola, Ark., mill doubling its capacity.

And U.S. Steel’s pipe and tube segment is expected to post “near breakeven” EBITDA thanks to an improved rig count, which should reduce pipe inventory in the energy supply chain and lead to customer demand for new product.

The company’s European segment – its steel mill in Kosice, Slovakia – should also see improved profitability on higher prices. But that mill, unlike U.S. Steel’s domestic mills, does not have its own mining and pelletizing operations, and so is exposed to higher iron ore costs. Increasing costs for emissions allowances will also be a headwind for the Slovakian plant, U.S. Steel said.