Nucor Corporation 2026 Q3 Earnings Call

Thank you, and good morning, everyone. Welcome to Nucor's third quarter earnings review and business update. Leading our call today is Leon Topalian, Chair and CEO, along with Steve Laxton, President and COO, and Jack Sullivan, CFO. Other members of Nucor's executive team are also here with us today, and may participate during the Q&A portion of the call. Yesterday, we posted our third quarter earnings release and investor presentation on Nucor's IR website. We encourage you to access these materials as we'll cover portions of them during the call. Today's discussion will include the use of non-GAAP financial measures and forward-looking information within the meaning of securities laws. Actual results may be different than forward-looking statements and involve risks outlined in our safe harbor statement and disclosed in Nucor's SEC filings. The appendix of today's presentation includes supplemental information disclosures along with a reconciliation of non-GAAP financial measures.

With that, let's turn the call over to Leon.

Thanks, Chris. I want to begin by recognizing our 33,000 teammates for making the summer of 2026 our safest summer ever. Summer brings added safety challenges, and our team met them with focus and determination. That's something to be proud of and it reflects our commitment to the most important value we have, safety. As we finish the year, let's keep looking out for one another and make sure every one of our team members goes home safely at the end of every shift. Turning to our third quarter financial results, Nucor delivered its strongest quarter in more than three years, with approximately $2.3 billion of EBITDA and earnings of $5.80 per share. Jack's going to unpack our results in more detail, but many of the themes we've highlighted throughout the year continue this quarter.

Strong demand across key end markets, growing contributions from recent investments, and federal policies that support a healthy domestic steel sector. With the capital spending moderating as major projects near completion, that strength is increasingly showing up in Nucor's free cash flow. We also remain committed to meaningful shareholder returns, returning $629 million in dividends and buybacks during the quarter, bringing our year-to-date total to nearly $1.4 billion. Operationally, the Nucor team is executing exceptionally well across each of our business segments. In our steel mills, quarterly shipments exceeded 7.2 million tons, setting another shipment record for the third consecutive quarter. This would not be possible without the investments we've made over the past six years, many of which are now online and contributing to our results. For example, the plate group set another quarterly shipment record.

Brandenburg shipped approximately 240,000 tons or roughly one-third of the group's total shipments. The team has done an amazing job bringing the mill's full capabilities online and advancing customer qualifications. The bar group also set another quarterly shipment record. Our Lexington micromill has had a very successful ramp-up since coming online last year. The team became EBITDA positive in March and has built on that progress, reaching a utilization rate of nearly 80% in the third quarter. We've also seen very strong results from Kingman, Arizona, and our micromills at Frostproof and Sedalia, as well as our upgraded Kankakee mill helped to deliver our best merchant bar quarter in several years. In steel products, we saw a significant improvement in quarterly earnings. Higher shipments and a notable inflection in pricing led to margin expansion across most of our major product groups.

Joist and Deck had a standout quarter with shipments up about 20% and realized pricing increasing by $110 a ton. In raw materials, our Louisiana DRI plant has begun capturing CO2 emissions for transport and storage through our project with ExxonMobil. The project is designed to capture and store up to 800,000 tons of CO2 annually, supporting our greenhouse gas emissions reduction goals and strengthening Nucor's position as one of the world's cleanest steel producers. Congratulations to our entire team in Louisiana on this achievement. The strength we are seeing in today's domestic steel market is being driven by healthy economic conditions and broad-based investment across key end markets. Nucor is benefiting from these conditions because trade policy improvements over the past decade have created a more level playing field.

In particular, vigorous trade law enforcements and strengthening Section 232 measures are allowing us to realize a greater share of the strong demand environment in the U.S. Finished steel imports are down more than 13% year over year and down 24% compared to 2024. Fair trade supports strong markets. Unfair trade distorts them. However, import volumes have been increasing in recent months, including a massive surge from South Korea, despite the Section 232 tariffs. From decades of experience fighting for a level playing field, we know we must always stay vigilant. Therefore, we will work closely with the administration to ensure trade measures remain robust and effective. Make no mistake, demand is very healthy. Even as imports have crept higher this year, domestic shipments have risen in each of the past three quarters.

Strong market fundamentals and favorable trade policies will continue to support a positive outlook for the domestic steel industry. With that, I'll turn it over to Steve for an update on our growth initiatives and market outlook.

Steve? Thank you, Leon, and thank you all for joining us this morning.

We're in the final stages of construction at our new sheet mill project in West Virginia, and we're commissioning equipment across the site. I want to thank the team in West Virginia for their hard work and excellent safety performance throughout the multi-year construction phase. They've kept the project on time and on budget while reaching several important milestones. In September, the melt shop produced its first heat, and in October, we started shipping coils from the pickle line to our downstream Nucor divisions. By December, we expect to run our first coils through the hot mill, cold mill, and construction-grade gal lines. As we complete commissioning, the team is preparing to ramp production in early 2027.

Our priority will be to operate safely and reliably while steadily increasing production toward our 50% utilization target by the end of 2027. Our sheet mill network provides an important advantage as production begins. By gradually shifting base load tons from other Nucor sheet mills to West Virginia, we can provide the new mill a steady base of orders to support a successful ramp through 2027 and 2028. As with any project of this scale and complexity, we expect startup costs to remain elevated in 2027 at levels similar to or higher to those in 2026. Turning to our Berkeley, South Carolina sheet mill, our new automotive-grade galvanizing line began production early this month. We expect utilization rates for the new gal line to reach 50% in the second quarter of next year, on its way to full run rate by the end of 2027.

At full production, this new line will add 500,000 tons of annual galvanizing capacity. Taken together, our investments in West Virginia and South Carolina enhance Nucor's ability to serve the automotive market, where we are relatively underweighted today. As both projects ramp and complete customer qualifications, we will build on the strong relationships we already have in place with many of North America's leading automakers. We are not simply waiting for these investments to ramp. While North American automotive production is essentially unchanged year to date, Nucor's flat-rolled shipments to automotive customers are up 4%. As we grow our automotive shipments, we're expanding what we can offer with the capabilities we have in place today. Recently, we commercialized exposed quality galvanized steel for the exterior panel of an SUV platform. We accomplished this using thin-slab casting, demonstrating Nucor's innovation in EAF steel making.

As new growth projects come online, we will have even more opportunities to expand our position in the automotive market. Moving to our towers and structures business, we are encouraged by how each of our facilities is progressing and the strength of our customer demand. Our Decatur, Alabama facility is on track to be EBITDA positive this month, while our Crawfordsville, Indiana facility began full production in the third quarter and is expected to follow a similar path toward profitability. Our Brigham City, Utah facility remains on track to reach full production by mid-2027. We are now qualified with more than 30 utilities, with additional customer qualifications underway, and we have entered into multi-year agreements with several of the largest utilities in the U.S. That momentum is reflected in our order backlog, which has more than doubled since the start of the year and extends into early 2028.