Nucor Corp (NUE) Q1 Earnings: Misses EPS Estimates, Reports Decline in Year-over-Year Profits

• Earnings Per Share (EPS): Reported at $3.46 per diluted share for Q1 2024, falling short of the estimated $3.66.

• Net Income: Achieved $844.8 million, below the forecast of $897.43 million.

• Revenue: Totalled $8.14 billion, surpassing the expected $8.257 billion, marking a 6% increase from Q4 2023 but a 7% decrease year-over-year.

• Steel Mill Segment Performance: Earnings increased due to higher average selling prices and volumes, particularly at sheet mills.

• Operational Efficiency: Steel mills operated at 82% capacity, up from 74% in the previous quarter and 79% year-over-year.

• Capital Return: Repurchased approximately 5.5 million shares at an average price of $180.79 per share; declared a quarterly cash dividend of $0.54 per share.

• Financial Position: Maintained a strong liquidity position with $5.54 billion in cash and equivalents, and an undrawn $1.75 billion credit facility.

On April 22, 2024, Nucor Corp (NYSE:NUE), a leader in the steel production industry, disclosed its financial results for the first quarter of 2024 through its 8-K filing. The company reported consolidated net earnings of $844.8 million, or $3.46 per diluted share, falling short of the analyst's EPS estimate of $3.66. This performance marks a decrease from the $1.14 billion, or $4.45 per diluted share, recorded in the same quarter the previous year.

Company Overview

Nucor Corp manufactures a broad range of steel and steel products, focusing on markets in the United States, Canada, and Mexico. The company operates through three segments: steel mills, steel products, and raw materials, with the steel mills segment being the most significant revenue contributor. Nucor is also noted for its role in international trading and sales, and its status as North America's largest recycler.

Financial Performance Insights

The company's consolidated net sales amounted to $8.14 billion, a 7% decrease from $8.71 billion in the first quarter of 2023, yet a 6% increase from $7.70 billion in the fourth quarter of 2023. The average sales price per ton saw a slight increase of 1% from the fourth quarter of 2023 but experienced a 3% decrease compared to the first quarter of the previous year. Total shipments to outside customers were 6,224,000 tons, indicating a 3% decrease year-over-year.

Segment Performance and Challenges

Earnings before taxes for the steel mills segment rose to $1.10 billion from $838.38 million in Q1 2023, driven by higher average selling prices and increased shipment volumes, particularly in sheet mills. However, the steel products segment witnessed a decline in earnings, attributed to lower selling prices and reduced volumes. The raw materials segment saw a slight improvement in earnings compared to the previous quarter.

Strategic Initiatives and Market Adaptation

Leon Topalian, Nucors Chair, President, and CEO, highlighted the company's strategic advancements in the rapidly growing data center market and its efforts to supply low carbon steel. Furthermore, Nucor introduced the Nucor Consumer Spot Price for hot-rolled coil products, enhancing customer transparency.

Financial Stability and Shareholder Returns

Nucor ended the quarter with a robust financial position, having $5.54 billion in cash and equivalents. The company also continues to return capital to shareholders, repurchasing approximately 5.5 million shares and declaring a quarterly cash dividend of $0.54 per share.

Outlook and Forward-Looking Statements

For the second quarter of 2024, Nucor anticipates a decrease in earnings, primarily due to expected lower average selling prices in the steel mills segment, although this may be partially offset by modestly increased volumes.

This detailed financial snapshot provides investors and stakeholders with a clear view of Nucor Corp's current economic standing and strategic direction, amidst fluctuating market conditions and ongoing operational enhancements.

Explore the complete 8-K earnings release (here) from Nucor Corp for further details.

This article first appeared on GuruFocus.