Nucor Posts 5 Percent Revenue Gain in Q2

Core Insights - Nucor reported Q2 2025 GAAP earnings per share of $2.60, slightly exceeding analyst expectations of $2.55, but lower than $2.68 from the previous year, indicating a year-over-year decline of 3% [1][2] - Revenue for the quarter was $8.46 billion, a 4.7% increase from $8.08 billion in Q2 2024, showcasing operational strength despite profitability pressures [2] - The company’s total steel mill shipments increased by 10.3% year-over-year, reflecting strong demand across various product categories [2][5] Financial Performance - Net earnings attributable to Nucor stockholders were $603 million, down 6.5% from $645 million in Q2 2024 [2] - EBITDA for the quarter was reported at $1.30 billion, up 4.8% from $1.24 billion in the same quarter last year [2] - The operating rate reached 85%, significantly higher than 75% in Q2 2024, indicating improved utilization of production capacity [5] Operational Highlights - Steel Mills segment reported a pre-tax profit of $843 million, an increase from $645 million a year ago, while Steel Products segment profit decreased to $392 million from $442 million [6] - The Raw Materials segment profit rose to $57 million from $39 million, driven by better scrap processing results [6] - Downstream steel product shipments increased by 6% year-over-year, with notable growth in joist, rebar fabrication, and tubular products [6] Cost Structure and Challenges - Average scrap cost per ton increased to $403, a 2% rise from Q1 2025 and a 1.8% increase from Q2 2024, impacting gross margins [7] - Operating costs, particularly for energy and conversion, have risen, contributing to margin pressures [7] - Start-up costs related to expansion projects totaled $136 million, reflecting investments in new facilities [7] Balance Sheet and Shareholder Returns - Nucor reported $2.48 billion in cash and short-term investments, with a fully undrawn $2.25 billion revolving credit facility [8] - The company continued its shareholder return strategy by repurchasing 1.8 million shares and maintaining a quarterly dividend of $0.55 per share, marking 209 consecutive quarterly payouts [8][9] Future Outlook - Management anticipates Q3 2025 earnings to be "nominally lower" than Q2 2025 due to expected margin compression in the steel mills segment [10] - Steel products and raw materials segments are expected to remain stable, while high start-up and operating costs are projected to persist [10] - Backlogs for key products are at historic highs, indicating sustained demand from infrastructure and advanced manufacturing sectors [10][11]