Nucor expects slimmer Q4 profits

Nucor Corp. anticipates fourth-quarter 2022 earnings to be in the range of $4.25 to $4.35 per diluted share, a nearly 33 percent drop from the $6.50 per share earned in the third quarter of this year.

The Charlotte, North Carolina-based electric arc furnace (EAF) steelmaker, which also operates several dozen scrap yards in its David J. Joseph (DJJ) business unit, earned $7.97 per diluted share in the fourth quarter of 2021, representing a 45 percent year-on-year drop in profit margin for Nucor.

“Full-year earnings for 2022 remain on track to exceed the record of $23.16 per diluted share Nucor set in 2021," the company says.

Nucor has been joined by fellow EAF producer Steel Dynamics Inc. in forecasting slimmer profits in the current quarter compared with the prior one.

In its raw materials business unit, which includes DJJ, Nucor cites lower scrap prices and interruptions to its direct-reduced iron (DRI) scrap alternative operations as affecting the firm’s overall profitability.

“The raw materials segment is expected to have significantly decreased earnings in the fourth quarter of 2022 as compared to the third quarter of 2022 due to decreased profitability of our direct-reduced iron facilities, both of which experienced planned outages during the fourth quarter, and decreased selling prices for raw materials,” Nucor says.

In terms of its steel mill operations, Nucor writes, “We expect considerably lower earnings in the fourth quarter of 2022 as compared to the third quarter of 2022 due to lower average selling prices, margin compression and lower volumes, with the largest decrease in profitability expected at our sheet mills. Shipments for our bar mills are expected to be lower due to seasonal factors with customers reducing inventories as year end approaches.”

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Demand for finished steel also is likely to drift lower this quarter, according to Nucor. “The steel products segment is expected to have strong earnings in the fourth quarter of 2022, but we expect the segment’s earnings to decline moderately from the third quarter of 2022 on lower volumes and selling prices," the company says. "While we believe these trends are mainly seasonal effects, economic uncertainty and recession concerns could impact future demand.”