Nucor Reports Significant Decline in Q3 Profits

Nucor Corp. has announced a sharp decline in its third quarter profits for 2024, reporting net earnings of approximately $250 million. This figure reflects a staggering 78 percent drop compared to the same quarter last year, and a 61 percent decrease from the previous quarter.

Earnings Breakdown
For Q3 2024, Nucor reported net earnings of $249.9 million, translating to $1.05 per share. The adjusted net earnings attributable to shareholders amounted to $353.0 million, or $1.49 per share. Notably, the company experienced noncash charges totaling $83 million—27 cents per diluted share—related to asset impairments in its raw materials and steel products segments.

Year-to-Date Performance
For the first nine months of 2024, consolidated net earnings attributable to Nucor stockholders reached $1.74 billion, equating to $7.22 per share. This marks a significant decline from the $3.74 billion, or $14.83 per share, reported in the same period last year, representing a 53 percent decrease.

Market Conditions and Challenges
Nucor President and CEO Leon Topalian emphasized the company’s strong market position and product diversity, which have allowed it to maintain returns for shareholders amidst market uncertainties. However, pre-operating and startup costs associated with growth projects reached approximately $168 million in the recent quarter, up from $101 million a year ago.

Segment Performance Insights
The primary contributor to Nucor’s decreased earnings in Q3 2024 was the steel mills segment, impacted by lower average selling prices. Additionally, earnings from the raw materials segment were adversely affected by the impairment charge taken during the quarter, which includes operations related to direct-reduced iron and metals recycling.

Scrap Costs and Shipment Trends
The average cost of scrap and scrap substitutes per gross ton for Nucor’s mills in Q3 2024 was $378, reflecting a 5 percent drop from the previous quarter and a 9 percent decline compared to Q3 2023. Total steel mill shipments decreased by 3 percent from the prior quarter, remaining on par with the same period last year. Furthermore, downstream steel product shipments to external customers fell 6 percent from Q2 2024 and 11 percent from Q3 2023.

Outlook for Q4 2024
Looking ahead, Nucor anticipates a further decrease in consolidated net earnings for Q4 2024. The expected decline is primarily attributed to lower average selling prices and decreased volumes within the steel mills segment. However, the company forecasts an increase in earnings for the raw materials segment, excluding the impact of the impairment charge.

Conclusion
Nucor’s third quarter results reflect significant challenges within the steel market, prompting caution as the company braces for potential declines in the upcoming quarter. Further details regarding impairment charges are expected to be revealed during the earnings conference call scheduled for October 22.

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