Nucor's Year-End 2024 Financial Report: Navigating Steel Market Softness
Nucor Corporation (NYSE: NUE), a leading U.S. steel producer, has unveiled its financial results for the fourth quarter and full year of 2024, reflecting a challenging but stable year marked by lower demand in the steel industry. While steel prices and volumes declined, Nucor’s diversified portfolio, strong balance sheet, and commitment to growth have enabled the company to stay resilient.
Fourth-Quarter Financial Performance
In the fourth quarter of 2024, Nucor reported consolidated net earnings attributable to stockholders of $287 million, or $1.22 per diluted share. This marked an increase from the third quarter of 2024, which had net earnings of $250 million, or $1.05 per diluted share. However, adjusted net earnings excluding non-cash impairment charges in Q3 2024 were higher at $353 million, or $1.49 per diluted share.
Compared to the same period last year, Nucor’s performance in Q4 2024 was slightly weaker, with net earnings down from $785 million, or $3.16 per diluted share, in Q4 2023. The decline in earnings was largely driven by a decrease in steel demand and a drop in average steel prices. Despite this, Nucor’s performance was buoyed by its diversification across various steel segments.
Full-Year Performance in 2024
For the full year 2024, Nucor reported consolidated net earnings attributable to stockholders of $2.03 billion, or $8.46 per diluted share, which is a significant decrease from $4.53 billion, or $18.00 per diluted share, in 2023. The downturn reflects the broader market conditions and declining steel prices across the board, including a 10% decrease in the average sales price per ton of steel.
Total net sales for 2024 amounted to $30.73 billion, a decrease of 11% from the $34.71 billion in 2023. Despite the decrease in revenue, Nucor’s strong cash reserves and operational efficiency helped mitigate some of the impacts of the market slowdown.
Segment Performance: A Mixed Bag
Nucor’s earnings varied significantly across its different business segments in 2024:
• Steel Mills: Earnings in the steel mills segment dropped to $169 million in Q4 2024, down from $588 million in the same period last year. For the full year, steel mill earnings totaled $2.23 billion, a steep decline from $3.71 billion in 2023.
• Steel Products: The steel products segment fared similarly, with a decrease in earnings to $329 million in Q4 2024 from $656 million in Q4 2023. Full-year results were also lower, totaling $1.60 billion, compared to $3.44 billion in 2023.
• Raw Materials: The raw materials segment saw a more favorable performance in Q4 2024, posting earnings of $57 million, compared to a loss of $14 million in Q4 2023. For the full year, the segment earned $40 million, down from $254 million in 2023.
Steel Shipments and Market Dynamics
In Q4 2024, Nucor shipped approximately 6.06 million tons of steel to outside customers, a decrease of 2% from Q3 2024. Despite the weaker market conditions, shipments were up 2% compared to the same period in 2023. For the entire year, total shipments amounted to approximately 24.77 million tons, which was a 2% decline from 2023.
The average sales price per ton for the fourth quarter decreased 3% compared to Q3 2024 and 10% compared to Q4 2023. The softening of steel demand was reflected in these price declines, further impacting revenue for Nucor.
Operational Efficiency and Strategic Investments
Nucor’s average scrap and scrap substitute cost per gross ton used in Q4 2024 was $381, marking a slight increase from Q3 2024 but a 4% decrease from Q4 2023. Overall, Nucor’s operating rate in its steel mills stood at 74% in Q4 2024, consistent with the same period in 2023 but a slight decrease from 75% in Q3 2024.
The company’s ongoing capital investment in growth projects continued to impact its financial results, with pre-tax, pre-operating, and start-up costs totaling $164 million in Q4 2024. These projects are vital to Nucor’s long-term growth strategy, even as they weigh on near-term profitability.
Financial Strength and Capital Return Strategy
Despite the headwinds in 2024, Nucor remains in a solid financial position. At the end of Q4, Nucor held $4.14 billion in cash and short-term investments, with no debt drawn on its $1.75 billion revolving credit facility. The company has the strongest credit ratings in North America’s steel sector, reaffirming its financial stability.
In keeping with its tradition of returning capital to shareholders, Nucor declared a cash dividend of $0.55 per share on December 11, 2024, payable on February 11, 2025. This marks the 207th consecutive quarterly cash dividend. The company also repurchased approximately 2.1 million shares of its common stock in Q4 2024, with an additional $1.11 billion available for repurchases under its existing program.
Outlook for Q1 2025
Looking ahead, Nucor is cautiously optimistic about its performance in the first quarter of 2025. The company expects earnings in its steel mills and steel products segments to remain similar to Q4 2024 levels. However, it anticipates a decline in earnings from the raw materials segment and slightly higher corporate, administrative, and tax costs, which may lead to overall lower net earnings for Q1 2025.
