Nucor Corporation Q3 2024 Earnings Report

Overview
Nucor Corporation (NYSE: NUE), a leading steel manufacturer, reported a solid third quarter in 2024, achieving an EBITDA of $869 million and adjusted earnings of $1.49 per share. Despite encountering challenges such as noncash pretax charges and a tough economic landscape, the company remains optimistic about its growth strategies and future prospects.

Key Takeaways

• Nucor's EBITDA for Q3 2024 was $869 million, with adjusted earnings of $1.49 per share.
• The company returned $2.3 billion to shareholders and completed $2.3 billion in capital expenditures.
• Future projects include a new melt shop in Arizona, a rebar micro mill in North Carolina, and an automotive galv line in South Carolina.
• Despite decreased steel demand and higher imports, Nucor is optimistic about opportunities in semiconductor factories and data centers.
• Fourth-quarter earnings are anticipated to decline due to reduced pricing and seasonal volume decreases.
• Nucor estimates 2024 capital expenditures at around $3.2 billion, focusing on growth-oriented projects.

Company Outlook

• Anticipated declines in fourth-quarter earnings primarily due to lower pricing and volumes.
• The capital expenditure for 2024 is projected at $3.2 billion, directed towards growth.
• Nucor maintains a strong balance sheet with $4.9 billion in cash reserves and a leverage ratio of approximately 1.4x trailing 12-month EBITDA.

Highlights

Bearish

• Decreased pretax earnings in the raw materials segment for Q3, with expected Q4 EBITDA significantly lower than Q3.
• Nucor faces challenges from reduced steel demand and higher imports.
• Preoperating startup costs in the steel segment of $168 million are affecting earnings.

Bullish

• Nucor's steel products segment remains optimistic despite market pressures.
• The company is making strides in sustainability and increasing demand for energy-efficient products.
• Nucor is investing in nuclear energy and carbon capture, highlighting a commitment to a low carbon footprint.

Misses

• Adjusted pretax earnings in the raw materials segment dropped by approximately $22 million from Q2 to Q3.
• Consolidated net earnings and EBITDA for Q4 are predicted to be lower than Q3.

Q&A Highlights

• Estimated a 10-year supply projection of 3-5 million tons, currently below this estimate.
• Potential for U.S. carbon-based tariffs by 2025, beneficial for domestic steel production.

Nucor's third-quarter performance illustrates its resilience amid market challenges. The company focuses on future growth and shareholder returns, while its commitment to sustainability positions it as a leader in steel manufacturing.

InvestingPro Insights

Nucor’s positive third-quarter performance reflects its financial stability and growth strategy, with a market capitalization of $34.79 billion and a P/E ratio of 10.61, indicating potential undervaluation. The company's strong dividend history and cash flow support ambitious capital expenditures.

Full Transcript – Nucor Corp (NUE) Q3 2024

Operator: Good morning, and welcome to Nucor’s Third Quarter 2024 Earnings Call.

Jack Sullivan: Thank you, and good morning, everyone. Welcome to Nucor’s Third Quarter Earnings Review and Business Update.

Leon Topalian: Thanks, Jack, and welcome, everyone. Before we begin, our hearts go out to our neighbors affected by recent hurricanes.

In Q3, we generated an EBITDA of $869 million and adjusted earnings of $1.49 per share, excluding noncash pretax charges totaling $123 million. Through September, we’ve returned $2.3 billion to shareholders.

Looking towards the future, our capital projects are on track and designed to address customer needs, enhancing long-term earnings growth.

In closing, our commitment to shareholder returns and prudent investments positions us for future success. Thank you for your time.

Operator: Thank you. This concludes today's conference call.