NUCOR CORP Q3 FY2024 earnings call

• Safety: Nucor remains on track for the safest year in history, with injury and illness rates trending lower, 35 of 109 divisions injury-free through September.
• Financial results: Generated EBITDA of $869 million and adjusted earnings of $1.49 per share in Q3; net earnings on GAAP basis were $250 million or $1.05 per share. Excluded noncash pretax charges of $123 million or $0.44 per share.
• Capital returns: Returned $2.3 billion to shareholders through share repurchases and dividends, and completed $2.3 billion of capital expenditures, funded by operating cash flow and cash on hand ($4.9 billion at quarter end).
• Capital projects: Commence operations of new melt shop in Kingman, AZ and rebar micro mill in Lexington, NC in H1 2025; complete construction of utility tower facilities and galv line in Indiana in 2025; commission automotive galv line in Berkeley County, SC and complete West Virginia mill in 2026.
• Acquisitions: Progress integrating Rytec and Southwest Data Products, with these businesses presenting growth opportunities.
• Trade advocacy: Advocating for vigorous enforcement of trade laws, filed cases against imports of corrosion-resistant flat-rolled steel, applauded ITC and DoC decisions related to trade classification.

In the third quarter, the steel mills segment generated pretax earnings of $309 million, a decrease of roughly 50% from the prior quarter. The steel products segment delivered adjusted pretax earnings of $354 million for the third quarter, a decline of approximately 20% compared to the second quarter, with volumes 6% lower than prior quarter. The raw materials segment realized adjusted pretax earnings of approximately $17 million for the quarter, down approximately $22 million from the second quarter. Over the 12-month period ending in September, the steel products segment contributed 42% of Nucor’s pretax earnings.

• Fourth quarter: Consolidated net earnings expected to be lower than Q3; steel mill segment earnings expected to decline on lower realized pricing and seasonally lower volumes; steel products segment expected to have sequentially lower earnings due to lower realized pricing and volumes; raw materials segment earnings expected to be moderately higher. Consolidated EBITDA for Q4 could be meaningfully lower than Q3.
• 2024 CapEx: Now expect full-year CapEx to be approximately $3.2 billion, slightly lower than initial estimate of $3.5 billion.
• 2025 CapEx: Expect to continue to have capital expenditures above historic norms.

• Higher import volumes: Put pressure on margins throughout the year.
• Economic uncertainties: Broader U.S. economy resilience, but decreased steel demand from end-use markets and need for more rate relief and looser lending conditions for flow-through to construction, industrial, and consumer durables markets.
• Trade policy changes: Any change to Vietnam’s market status could impact antidumping duties calculation, and election outcomes could affect trade and infrastructure spending policies.

Q: About Brandenburg, comment on ramp up and plate pricing outlook.

A: Leon Topalian and Brad Ford discussed Brandenburg ramping up well, team operating safely, proud of plate group's diverse offerings; Brandenburg built to expand plate group capabilities, seeing improvements in utilization, product development, etc.

Q: Thoughts on when lower interest rates might flow through to steel pricing and demand.

A: Leon Topalian said clarity from election (in ~2.5 weeks) could help, with interest rate flow-through and fiscal policy clarity expected post-November; Steve Laxton added macroeconomic conditions are encouraging with stable unemployment and CPI/PCE trends.

Q: IIJA, IRA, CHIPS Act impact and future materialization.

A: Leon Topalian said CHIPS has committed projects, but IIJA and IRA still in early stages, waiting on election outcomes and fiscal/monetary policies to drive flow-through; Timna Tanners asked about 5-7 million tons targeted additional tons, Leon said under that scale so far.

Q: Steel conversion costs guidance in 4Q, why decline with lower volumes.

A: Dave Sumoski said costs affected by inflation, start-up costs, but utilizations expected to go up as start-ups increase, and costs will stabilize as startups roll off.

Q: Carbon-based tariffs in U.S. in 2025.

A: Leon Topalian said yes, to level playing field as U.S. has cleanest steel industry; Greg Murphy added Nucor actively participating in ITC process for transparency in carbon border adjustment mechanism.

Q: Steel mill guidance for 4Q, longs vs flats.

A: Leon Topalian, Steve Laxton, Brad Ford discussed imports affecting pricing, structural demand resilience in some areas, seasonality impact on longs and flats, with sheet steel sales on contract basis having lag effect on realized prices.

Q: CapEx, optimization of footprint.

A: Steve Laxton said will provide more detailed guidance at Q4 call; Leon Topalian said always monitoring and rationalizing footprint for best product production and customer location, but not for closing older capacity to build new ones.