Dive Brief:
- Steelmaker Nucor saw a drop in performance at the top of the year, posting Q1 earnings of $156 million, an 81% year-over-year plummet from $845 million in Q1 2024.
- Despite the lower performance, the company is optimistic about its position in the industry, with CFO Steve Laxton saying on an earnings call Tuesday that demand remains in line with its forecast for the year.
- Even as tariffs drive up costs, CEO Leon Topalian said the net effect on the industry will be beneficial: "The small impact potential of higher raw material price vastly is much smaller than the impact of the overall macroeconomic trends in the industry, a healthy, vibrant steel industry.”
Dive Insight:
Despite the massive YoY drop in net earnings, Nucor has begun to bounce back from a soft 2024 — consolidated net sales hit $7.83 billion in Q1, up 11% from the previous quarter. Prices continued to sag however, with the average sale price per ton down 12% YoY.
Nucor executives said on the earnings call the company has yet to see a significant change in consumer demand after the Trump administration implemented a 25% tariff on steel imports.
Topalian said that while the company saw some "pull through" of orders ahead of the tariffs taking effect, Nucor's order books remained strong in March and April.
"We did see some urgency coming right as those were announced," the CEO said. "But the important part of that and looking through that pull through is what happened on the back end of that in the last month or two. And what we've seen is no drop-off at all in terms of order entry rates and inquiries."
The company is particularly optimistic about its order backlog. Order backlogs for steel mill segments rose more than 30% in Q1, while steel product backlogs were up 25%, though Topalian did say that some of those orders could be attributed to those earlier orders ahead of tariffs.
Nucor expects Q2 revenue to rise above first quarter levels. Laxton said the company remains optimistic about improving demand and the long-term benefits of its ongoing capital investments.
"We still expect to see growth in domestic steel demand this year, and we're confident in our ability to capture a healthy share of that demand with the best and most diverse range of solutions in the marketplace,” Laxton said.
The company is also in the midst of standing up multiple new factories, which it expects will boost output in the coming months. Nucor's updated Alabama steel mill is set to begin operations in Q3, while its Indiana production facility is slated to open in Q1 2026. The steelmaker's $3 billion West Virginia mill is near the midpoint of construction, Topalian said.
“We're optimistic in our backlog to order entry rates, our pricing stability throughout the entire enterprise as well as the demand drivers like the segments that we serve in data centers, energy, warehousing, the advanced manufacturing towers and structures and those two plants that will be coming up online in the coming weeks,” the CEO said.
