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 segments 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 company shipped 5,719,000 short (st) in the quarter in its steel mill segment vs. 5,746,000 st in Q3’24, roughly level. However, Nucor said shipments were down 3% from a year earlier.
Finally, the segment had earnings before income taxes and noncontrolling interests of $309,123 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 is down 5% from $396 in Q2’24 and a 9% decrease from $415 in Q3’23.
Earnings also dropped quarter over quarter in both the steel products and raw materials segments, respectively.
Outlook
Nucor expects net earnings in Q4’24 to fall vs. earnings per diluted share of $1.05 in Q3’24.
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 quarter over quarter (excluding an impairment charge).
Ethan Bernard
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