Nucor Reports Results for the Third Quarter of 2023

Third Quarter of 2023 Highlights

• $4.57 earnings per diluted share for the third quarter, bringing year-to-date diluted EPS to $14.83
• Net earnings attributable to Nucor stockholders of $1.14 billion
• Net earnings before noncontrolling interests of $1.22 billion; EBITDA of $1.82 billion
• Returned $627 million to stockholders during the quarter through share repurchases and dividends

CHARLOTTE, N.C., Oct. 23, 2023 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) today announced consolidated net earnings attributable to Nucor stockholders of $1.14 billion, or $4.57 per diluted share, for the third quarter of 2023. By comparison, Nucor reported consolidated net earnings attributable to Nucor stockholders of $1.46 billion, or $5.81 per diluted share, for the second quarter of 2023 and $1.69 billion, or $6.50 per diluted share, for the third quarter of 2022.  

In the first nine months of 2023, Nucor reported consolidated net earnings attributable to Nucor stockholders of $3.74 billion, or $14.83 per diluted share, compared with consolidated net earnings attributable to Nucor stockholders of $6.35 billion, or $23.85 per diluted share, in the first nine months of 2022.

"We are on pace to set another safety record for the fifth consecutive year. And with $14.83 of earnings per diluted share for the first nine months of 2023, this already represents the third-best full-year result in Nucor's history. We believe that our world-class manufacturing team, product diversity, and our sustainable solutions set us up for continued success over the long term," said Leon Topalian, Nucor's Chair, President and Chief Executive Officer. "The investments we are making to grow our core businesses and expand into new products continue to generate attractive returns for stockholders."

Selected Segment Data
Earnings (loss) before income taxes and noncontrolling interests by segment for the third quarter and first nine months of 2023 and 2022 were as follows (in thousands):

Financial Review
Nucor's consolidated net sales decreased 8% to $8.78 billion in the third quarter of 2023 compared with $9.52 billion in the second quarter of 2023 and decreased 16% compared with $10.50 billion in the third quarter of 2022. Average sales price per ton in the third quarter of 2023 decreased 3% compared with the second quarter of 2023 and decreased 14% compared with the third quarter of 2022. A total of 6,240,000 tons were shipped to outside customers in the third quarter of 2023, a 5% decrease from the second quarter of 2023 and a 3% decrease from the third quarter of 2022. Total steel mill shipments in the third quarter of 2023 decreased 4% as compared to the second quarter of 2023 and decreased 2% as compared to the third quarter of 2022. Steel mill shipments to internal customers represented 20% of total steel mill shipments in the third quarter of 2023 and the second quarter of 2023, compared with 22% in the third quarter of 2022. Downstream steel product shipments to outside customers in the third quarter of 2023 decreased 4% from the second quarter of 2023 and decreased 12% from the third quarter of 2022.

In the first nine months of 2023, Nucor's consolidated net sales of $27.01 billion represented a decrease of 18% compared with consolidated net sales of $32.79 billion reported in the first nine months of 2022. Total tons shipped to outside customers in the first nine months of 2023 were 19,271,000, a decrease of 3% from the first nine months of 2022, and the average sales price per ton in the first nine months of 2023 decreased 15% from the first nine months of 2022.

The average scrap and scrap substitute cost per gross ton used in the third quarter of 2023 was $415, a 9% decrease compared to $455 in the second quarter of 2023 and a 17% decrease compared to $502 in the third quarter of 2022. The average scrap and scrap substitute cost per gross ton used in the first nine months of 2023 was $429, a 16% decrease compared to $511 in the first nine months of 2022.

Pre-operating and start-up costs related to the Company's growth projects were approximately $101 million, or $0.31 per diluted share, in the third quarter of 2023, compared with approximately $90 million, or $0.27 per diluted share, in the second quarter of 2023 and approximately $52 million, or $0.15 per diluted share, in the third quarter of 2022.

In the first nine months of 2023, pre-operating and start-up costs related to the Company's growth projects were approximately $273 million, or $0.83 per diluted share, compared with approximately $174 million, or $0.50 per diluted share, in the first nine months of 2022.

Overall operating rates at the Company's steel mills decreased to 77% in the third quarter of 2023 as compared to 84% in the second quarter of 2023 and 77% in the third quarter of 2022. Operating rates in the first nine months of 2023 were 80%, which was the same as the first nine months of 2022.

Financial Strength
At the end of the third quarter of 2023, we had $6.73 billion in cash and cash equivalents, short-term investments and restricted cash and cash equivalents on hand. The Company's $1.75 billion revolving credit facility remains undrawn and does not expire until November 2026.  Nucor continues to have the strongest credit rating in the North American steel sector (A-/A-/Baa1) with stable outlooks at Standard & Poor's, Fitch Ratings and Moody's.

Commitment to Returning Capital to Stockholders
During the third quarter of 2023, Nucor repurchased approximately 3.0 million shares of its common stock at an average price of $168.99 per share (approximately 8.8 million shares during the first nine months of 2023 at an average price of $157.36 per share). On May 11, 2023, Nucor's board of directors approved a new share repurchase program under which Nucor is authorized to repurchase up to $4.00 billion of Nucor's common stock and terminated any previously authorized share repurchase programs. As of September 30, 2023, Nucor had approximately 27.0 million shares outstanding and approximately $3.5 billion remaining for repurchases under its authorized share repurchase program. This share repurchase authorization is discretionary and has no scheduled expiration date.

On September 14, 2023, Nucor's board of directors declared a cash dividend of $0.51 per share. This cash dividend is payable on November 9, 2023 to stockholders of record as of September 29, 2023 and is Nucor's 202^nd consecutive quarterly cash dividend.

Third Quarter of 2023 Analysis
Earnings for the steel mills segment declined in the third quarter of 2023 as compared to the second quarter of 2023 primarily due to lower pricing, and to a lesser extent, decreased volumes. The largest impact on earnings occurred at our sheet mills. The earnings of the steel products segment decreased in the third quarter of 2023 as compared to the second quarter of 2023 also due to lower realized prices and volumes. Earnings for the raw materials segment decreased in the third quarter of 2023 as compared to the second quarter of 2023 due to margin compression at our direct reduced iron, or DRI, facilities and scrap processing operations.

Fourth Quarter of 2023 Outlook
We expect earnings in the fourth quarter of 2023 to decrease compared to the third quarter of 2023 due primarily to lower pricing across all three operating segments, and, to a lesser extent, decreased volumes. In the steel mills segment, we expect the decrease in realized pricing to be most pronounced at our sheet mills. In the steel products segment, we expect decreased earnings due to moderating average selling prices at most of the product groups within the steel products segment and lower volumes. Earnings for the raw materials segment are expected to decrease in the fourth quarter of 2023 as compared to the third quarter of 2023 due to lower pricing for raw materials and planned outages at our DRI facilities.

Earnings Conference Call
You are invited to listen to the live broadcast of Nucor's conference call during which management will discuss Nucor's third quarter results on October 24, 2023 at 10:00 a.m. Eastern Time. The conference call will be available over the Internet at www.nucor.com, under Investors.

About Nucor
Nucor and its affiliates are manufacturers of steel and steel products, with operating facilities in the United States, Canada and Mexico. Products produced include: carbon and alloy steel -- in bars, beams, sheet and plate; hollow structural section tubing; electrical conduit; steel racking; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; precision castings; steel fasteners; metal building systems; insulated metal panels; overhead doors; steel grating; wire and wire mesh; and utility structures. Nucor, through The David J. Joseph Company and its affiliates, also brokers ferrous and nonferrous metals, pig iron and hot briquetted iron / direct reduced iron; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America's largest recycler.

Non-GAAP Financial Measures
The Company uses certain non-GAAP (Generally Accepted Accounting Principles) financial measures in this news release, including EBITDA. Generally, a non-GAAP financial measure is a numerical measure of a company's performance or financial position that either excludes or includes amounts that are not normally excluded or included in the most directly comparable financial measure calculated and presented in accordance with GAAP.

We define EBITDA as net earnings before noncontrolling interests, adding back the following items: interest (income) expense, net; provision for income taxes; depreciation; and amortization. The Company believes that this definition of EBITDA is a more relevant supplemental measure of performance. First and second quarter of 2023 EBITDA was $1.89 billion and $2.34 billion, respectively, using this definition. Please note that other companies might define their non-GAAP financial measures differently than we do.

Management presents the non-GAAP financial measure of EBITDA in this news release because it considers it to be an important supplemental measure of performance. Management believes that this non-GAAP financial measure provides additional insight for analysts and investors evaluating the Company's financial and operational performance by providing a consistent basis of comparison across periods.

Forward-Looking Statements
Certain statements contained in this news release are "forward-looking statements" that involve risks and uncertainties which we expect will or may occur in the future and may impact our business, financial condition and results of operations. The words "anticipate," "believe," "expect," "intend," "project," "may," "will," "should," "could" and similar expressions are intended to identify those forward-looking statements. These forward-looking statements reflect the Company's best judgment based on current information, and, although we base these statements on circumstances that we believe to be reasonable when made, there can be no assurance that future events will not affect the accuracy of such forward-looking information. As such, the forward-looking statements are not guarantees of future performance, and actual results may vary materially from the projected results and expectations discussed in this news release. Factors that might cause the Company's actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: (1) competitive pressure on sales and pricing, including pressure from imports and substitute materials; (2) U.S. and foreign trade policies affecting steel imports or exports; (3) the sensitivity of the results of our operations to general market conditions, and in particular, prevailing market steel prices and changes in the supply and cost of raw materials, including pig iron, iron ore and scrap steel; (4) the availability and cost of electricity and natural gas, which could negatively affect our cost of steel production or result in a delay or cancellation of existing or future drilling within our natural gas drilling programs; (5) critical equipment failures and business interruptions; (6) market demand for steel products, which, in the case of many of our products, is driven by the level of nonresidential construction activity in the United States; (7) impairment in the recorded value of inventory, equity investments, fixed assets, goodwill or other long-lived assets; (8) uncertainties and volatility surrounding the global economy, including excess world capacity for steel production, inflation and interest rate changes; (9) fluctuations in currency conversion rates; (10) significant changes in laws or government regulations affecting environmental compliance, including legislation and regulations that result in greater regulation of greenhouse gas emissions that could increase our energy costs, capital expenditures and operating costs or cause one or more of our permits to be revoked or make it more difficult to obtain permit modifications; (11) the cyclical nature of the steel industry; (12) capital investments and their impact on our performance; (13) our safety performance; (14) our ability to integrate businesses we acquire; and (15) the impact of the COVID-19 pandemic, any variants of the virus, and any other similar pandemic or public health situation. These and other factors are discussed in Nucor's regulatory filings with the United States Securities and Exchange Commission, including those in "Item 1A. Risk Factors" of Nucor's Annual Report on Form 10-K for the year ended December 31, 2022. The forward-looking statements contained in this news release speak only as of this date, and Nucor does not assume any obligation to update them, except as may be required by applicable law.

SOURCE Nucor Corporation

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