NUCOR CORP Q3 FY2026 earnings call

• Safety Leadership: The company achieved its safest summer ever in 2026, emphasizing safety as its core value.
• Record Production: Steel mill shipments set records for the third consecutive quarter, exceeding 7.2 million tons. The Plate Group and Bar Group both achieved quarterly shipment records.
• West Virginia Sheet Mill: Construction is in final stages, with commissioning expected to complete by December 2026. Full ramp-up is targeted for early 2027, aiming for 50% utilization by end of 2027. Startup costs are expected to remain elevated in 2027.
• Automotive Expansion: A new automotive-grade galvanizing line began production at the Berkeley, SC plant, adding 500,000 tons of annual capacity. Nucor secured an entire SUV platform contract with General Motors for exposed quality galvanized steel using thin slab casting technology.
• Towers and Structures: This segment's long-term annual EBITDA contribution forecast was raised to approximately $200 million (from $150 million). Facilities in Decatur, AL, and Crawfordsville, IN, are progressing toward profitability, while Brigham City, UT, is on track for full production by mid-2027.
• Sustainability: The Louisiana DRI plant has begun capturing up to 800,000 tons of CO2 annually through a partnership with ExxonMobil.
• Trade Policy: Management highlighted strong domestic demand despite a 13% year-over-year decline in finished imports, urging continued vigilance against unfair trade practices, particularly from South Korea.

Nucor delivered its strongest quarter in over three years with approximately $2.3 billion of EBITDA and earnings of $5.80 per share. The Steel Mills segment generated record shipments exceeding 7.2 million tons, driven by new capacity from Brandenburg, Lexington Micro Mill, and other recent investments. Steel Products saw a significant improvement in quarterly earnings, with pre-tax earnings increasing to $465 million (up $112 million from Q2) due to a 6% volume increase and 7% rise in average selling prices, leading to a 200 basis point expansion in EBITDA margin. Raw Materials reported pre-tax earnings of $105 million, down from $146 million in the prior quarter due to lower pricing and shipments. Startup and pre-operating costs totaled $124 million.

• Q4 2026 Outlook: Consolidated earnings are expected to be in line with or modestly higher than Q3 results ($5.80/share).
• Steel Mills: Earnings expected to remain stable; higher pricing is anticipated to offset seasonally lower volumes and increased startup costs at West Virginia.
• Steel Products: Earnings expected to remain stable, supported by higher pricing offsetting lower volumes.
• Raw Materials: Slightly lower earnings expected due to lower realized DRI pricing.
• Full Year 2026 Capital Expenditures: Expected to finish at or slightly below the original estimate of $2.5 billion.
• 2027 Capital Expenditures: Expected to decline further from peak spending levels in 2024-2025 as major projects near completion.
• Shareholder Returns: Commitment to return at least 40% of net earnings annually; nearly $1.4 billion returned year-to-date.

• Operational Costs: Conversion costs may see a modest uptick in Q4 due to lower fixed cost absorption, planned outages, and higher startup spending at the West Virginia facility.
• Import Surge: Finished import volumes have increased recently, including a surge from South Korea, posing competitive risks despite Section 232 tariffs.
• Ramp-Up Execution: The successful commercialization and qualification of new products, such as exposed automotive panels, carry execution risk during the transition from prototype to mass production.
• Seasonality: Q4 typically faces volume softness due to holidays and winter weather, which could impact shipping volumes relative to Q3.

Q: Goldman Sachs asked about organic volume growth potential for 2027 and key confidence drivers. / A: CEO Leon Topalian stated that Nucor has invested $19 billion over six years to position for future demand. He highlighted robust demand across data centers (15% of backlog), chips, natural gas/LNG, nuclear utilities, and defense. He emphasized that capex unwinding in 2027 will significantly boost free cash flow alongside margin expansion and new project contributions.

Q: Goldman Sachs followed up on cost inflation and margin trajectory. / A: CFO Jack Sullivan noted that while conversion costs ticked up due to consumables, freight, energy, and overtime at high utilization, EBITDA margins expanded to over 20%. The lack of Q2 tariff refunds and more planned outages contributed to higher costs. Modest cost increases are expected in Q4.

Q: JP Morgan asked about Q4 shipment seasonality and potential upside. / A: Jack Sullivan explained that Q4 has five to six fewer shipping days due to holidays and weather, plus planned outages. However, coming off record Q3 orders, management aims to ship every ton possible. Historically, Q3-to-Q4 shipments trend down ~7%, but stronger pricing should neutralize volume softness for flat earnings.

Q: BofA Securities asked about merchant bar dynamics and rebar displacement. / A: EVP Randy Spicer cited record shipments driven by data center construction (AI infrastructure). While some rebar producers are moving into merchant bar, Nucor’s strategic shifts (e.g., Darlington to SBQ/Wire Rod, Kankakee to heavy SBQ) allow it to capture high-margin opportunities without negatively impacting the growing rebar market.

Q: Wells Fargo asked about the composition of data center backlog and auto contract structures. / A: Executives clarified that data centers represent 15% of enterprise backlog, with structural steel exposure at 30-35%. Regarding autos, Nucor won a GM platform for exposed panels. Contracts are largely variable, with only ~5-7% fixed (mostly auto), which reset at year-end. Commercial terms for 2027 are significantly better with tighter volume variances.