Nucor sees narrower profits in late 2023

Nucor Corp., Charlotte, North Carolina, has announced earnings guidance for the fourth quarter of this year that has its earnings per share dropping nearly 40 percent from the prior quarter and about 43 percent year on year.

That statement from the company indicates it expects fourth-quarter 2023 earnings to be $2.75 to $2.85 per diluted share. Nucor reported net earnings of $4.57 per diluted share in the third quarter of 2023 and $4.89 per diluted share in the fourth quarter of 2022.

“Earnings in the fourth quarter of 2023 are expected to decrease compared to the third quarter of 2023 due to lower pricing and volumes across all three operating segments,” says Nucor says, which operates a network of scrap-fed electric arc furnace (EAF) steel mills and scrap processing facilities.

"In the steel mills segment, we expect the decrease in realized pricing to be most pronounced at our sheet and plate mills. In the steel products segment, we expect decreased earnings due to moderating average selling prices at most of the product groups within the segment and lower volumes.”

Ferrous scrap prices in the fourth quarter of this year have been on upward trend, having risen as much as $40 per ton in November and December, depending on the grade. That price raises costs on the steelmaking side but carries the potential to improve profitability for Nucor’s David J. Joseph scrap processing subsidiary.

However, the firm says earnings its raw materials segment are expected to decrease in the fourth quarter of 2023 compared with the third quarter of 2023 due to lower pricing for raw materials and planned outages at our direct-reduced iron (DRI) facilities.

On the accounting front, Nucor will report two tax-related benefits of about $148 million this quarter but also a write-off of $96 million.

It describes the benefits as being “related to state tax credits [and] a change in the valuation allowance of a state deferred tax asset.”

Nucor says the red ink pertains to writing off “the remaining carrying value of the company’s leasehold interest in unproved oil and gas properties” that on the balance sheet is included in the company’s raw materials segment.

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Nucor has scheduled the release of its fourth-quarter 2023 earnings for Jan. 29, 2024, followed by a conference call at 10 a.m. Eastern the next day.