Steel Mills
Nucor Q3 profit falls sharply on lower steel prices, further drop seen in Q4
Written by Ethan Bernard
October 21, 2024
Nucor Corp.
| Third quarter ended Sept. 28 | 2024 | 2023 | Change |
|---|---|---|---|
| Net sales | $7,444.2 | $8,775.7 | -15.2% |
| Net earnings (loss) | $249.9 | $1,141.5 | -78.1% |
| Per diluted share | $1.05 | $4.57 | -77.0% |
| Nine months ended Sept. 28 | |||
| Net sales | $23,658.4 | $27,009.0 | -12.4% |
| Net earnings (loss) | $1,740.0 | $3,739.4 | -53.5% |
| Per diluted share | $7.22 | $14.83 | -51.3% |
Nucor’s profits dropped precipitously in the third quarter on lower prices in its steel mills segment, and the company expects a continued earnings slide for Q4’24.
The Charlotte, N.C.-based steelmaker posted net earnings of $249.9 million in the quarter ended Sept. 28, off 78% from $1.14 billion a year earlier. Net sales slid 15% to $7.44 billion in the same comparison.
“Nucor’s market leadership, product diversity, and strong balance sheet enable us to provide meaningful returns to shareholders and execute our growth strategy even in the face of market uncertainty,” Leon Topalian, Nucor’s chair, president and CEO, said in a statement after market close on Monday.
Steel mill segment hurts profits
The company cited a decline in average selling prices in its steel mills segment as the primary driver for decreased earnings quarter over quarter.
The average sales price per ton in Q3’24 fell 6% vs. the previous quarter and was off 15% from a year earlier.
The steel mill segment shipped 5,719,000 short tons (st) in the quarter, roughly level with 5,746,000 st in the same quarter last year. However, Nucor said shipments were down 3% sequentially.
Finally, the segment had earnings before income taxes and noncontrolling interests of $309.1 million in Q3’24, off 65% from a year earlier.
Scrap prices also declined in the quarter, the company said. The average scrap and scrap substitute cost per gross ton used in Q3’24 was $378. This was down 5% from $396 in the previous quarter and 9% from $415 in Q3’23.
Earnings also dropped sequentially in both the steel products and raw materials segments.
Outlook
Nucor expects net earnings in Q4’24 to fall from Q3’24 earnings of $1.05 per diluted share.
The primary reason: Anticipated weaker earnings in the steel mills segment caused by lower average selling prices and declining volumes.
The company expects a similar scenario in its steel products segment.
However, Nucor predicted that earnings in its raw materials segment would increase q/q (excluding an impairment charge).
Ethan Bernard
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