Nucor Corporation Q3 FY2025 earnings call

• Safety: Nucor teammates have been lowering injury and illness rates since 2017 and are on track to do so in 2025. - Financial Results: Generated EBITDA of approx. $1.3 billion and EPS of $2.63, exceeding third quarter guidance. - Capital Management: Reinvested $807 million in the quarter, returned ~$230 million to shareholders, and long-term credit ratings upgraded to A3 by Moody's. - Projects: Commissioned two bar mill projects, commenced pole production in galvanizing, new sheet coating facilities on track, West Virginia sheet mill 2/3 complete. - Asset Repurposing: Repurposed steel products facilities for Nucor data systems and decided against Rebar micro mill in Pacific Northwest. - Trade Policy: Federal action supporting the American steel industry, with imports down, and ongoing trade cases providing defense against unfairly traded imports. - Demand: Data centers and infrastructure driving demand for long products, strong demand in nonresidential construction for steel products.

The steel mills segment generated $793 million of pretax earnings in the third quarter, a decrease of 6% from the prior quarter. Improved results were seen in bar and structural steel groups, but lower profitability in sheet and plate offset gains. The steel products segment generated pretax earnings of $319 million, down from $392 million in the second quarter, with volumes holding up better than expected but impacted by product mix and substrate pricing. The raw materials segment realized pretax earnings of approximately $43 million, a sequential decline due to lower pricing partially offset by lower operating costs. The bar group achieved quarterly rebar shipment records, and the Berkeley division set an all-time production record in September. Sheet shipments nearly matched prior quarter records with 13% year-over-year growth in backlog tons, and bar products backlog was 35% higher year-over-year.

• Q4: Expected consolidated earnings lower than third quarter due to seasonal effects, fewer shipping days, and two DRI facility outages; lower realized pricing in steel mills segment, stable pricing in steel products segment. - 2026: Expect stable domestic steel demand, confident in capturing a healthy share of demand with broad capabilities in North American steel market.

• Evolving trade policy could impact operations. - Higher construction costs may affect demand. - Persistent softness in residential construction activity. - Global steel overcapacity remains an issue despite tariffs.

Q: Congrats on the strong results. Could you give more color on products where Nucor is gaining share?

A: Leon Topalian mentioned focus on being market leader, with examples like the plate group (Brandenburg ramping up) and long products, and commercial/construction solutions group targeting major developers and hyperscalers. John Hollatz added joist and deck backlogs up 25% year-over-year due to data center build-out and e-commerce.

Q: Follow-up on data centers, any specific products exposed?

A: Leon Topalian listed insulated metal panels, joist, grading, decking, fasteners, sprinkler, conduit, foundations, rebar, sheeting, overhead doors. John Hollatz noted joist and deck benefiting from data center build-out and e-commerce.

Q: Guide for Q4, lower volumes due to fewer shipping days, how about recent pricing moves?

A: Leon Topalian said most sheet deliveries are on contracts, Q4 sees lower realized pricing due to typical seasonality and softer Q2 flow, but Q1 will realize higher pricing due to low inventory and fast realization.

Q: Acquisition opportunities?

A: Leon Topalian said focus on growing core steelmaking capabilities and expanding beyond, looking for like-minded culture, converter model, low capital intensity, high margins, countercyclical to steel cycles. Examples include C.H.I., Rytec, IMP.

Q: Seattle mill decision, not replacing with micro mill?

A: Leon Topalian said prudent capital allocation, with melt shop in Kingman, Arizona and Utah facility providing coverage for Western US and Canada, using dollars elsewhere for growth.

Q: Shareholder returns, Q3 buybacks smallest since 2020?

A: Stephen Laxton said remain committed to returning at least 40% of earnings annually, over the last five years returned ~60% of earnings, balancing investment and returns.