Steel Mills
Nucor Predicts Q3 Earnings Drop on Lower Sheet Mill Profits
July 24, 2023
Nucor reported sequentially higher second quarter earnings but warned that results would be worse in the third quarter.
“We expect earnings in the third quarter of 2023 to decrease compared to the second quarter of 2023,” the company said in comments released with Q2 earnings results on Monday, July 24.
The Charlotte, N.C.-based steelmaker posted net income of $1.46 billion in Q2’23, up 28% from $1.14 billion in Q1’23 but off 43% from $2.56 billion in Q2’22 on sales that dropped 19% to $9.52 billion year over year.
Nucor said margin expansion at its sheet mills helped drive sequentially higher earnings as did increased volumes in the steel products segment and improved profitability at its direct-reduced iron (DRI) facilities.
But the company’s total steel shipments stood at 6.0 million tons in Q2, down 7% from 6.4 million tons a year earlier. Plate products, however, bucked the overall trend, rising 10% to 520,000 tons.
Nucor said that overall operating rates at its steel mills were 84% in Q2, up from 79% in Q1 but off from 85% a year earlier.
Start-up costs related to its growth projects were ~$90 million in Q2, up from ~$82 million in Q1 and from ~$60 million in the same period a year earlier, the company said.
Recall that on the flat-rolled side alone, Nucor is expanding capacity at its Gallatin sheet mill in Kentucky while also starting up a plate mill in Brandenburg, Ky., and building a new sheet mill in West Virginia.
“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,” Nucor chair, president, and CEO Leon Topalian said in a statement.
Looking ahead, Nucor expects Q3 earnings to decrease vs. Q2. The company cited “decreased profitability, with the largest impact at our sheet mills.” For its steel products segment in general, Nucor expects earnings to “moderate” in Q3. Finally, in its raw materials segment, the company expects earnings to fall sequentially in Q3 “due to margin compression at our DRI facilities and scrap-processing operations.”
By Ethan Bernard, ethan@steelmarketupdate.com
Latest in Steel Mills
Hot-rolled coil market remains slow, market participants say
Hot rolled spot market participants reported another week of moderate demand and ample supply, with no strong signs that conditions will change next week.
CRU: Blackout knocks out ArcelorMittal mill ‘for months’
Truchas works in Lazaro Cadenas, Michoacan, western Mexico. Repairs may take up to six months.
Nippon Steel posts quarterly loss on cost to buy U.S. Steel
Nippon Steel earnings take hit from buy of U.S. Steel.
Atlas completes Evraz NA deal, renames firm, and hires former USS exec as CEO
Atlas Holdings has completed its acquisition of Evraz North America (Evraz NA) and its subsidiaries.
ArcelorMittal: As tariffs slow global growth, Calvert could be a bright spot
ArcelorMittal expects less demand growth across most of the markets it operates in, including the US, because of President Donald Trump’s tariffs. But the Luxembourg-based steelmaker also thinks it stands to benefit from an increasingly regionalized world thanks to investments like the new EAF at its mill in Calvert, Ala.