Nucor Hammers Out A Strong Q1

Nucor’s first quarter landed with the kind of industrial thud investors actually like — higher earnings, higher sales, and a better outlook. The company reported first-quarter net earnings attributable to stockholders of $743 million, or $3.23 per diluted share, on net sales of $9.50 billion. EBITDA reached $1.51 billion. That was a sharp jump from the fourth quarter, when Nucor earned $378 million, or $1.64 per share, and it also cleared the $2.70 to $2.80 per-share range the company had guided to in March.

The strongest signal came from the company’s steel mills, which is exactly where investors wanted the quarter to prove itself. Nucor said the segment achieved a new quarterly shipment record, with earnings before income taxes and noncontrolling interests rising to $1.13 billion from $516 million in the fourth quarter and $231 million a year earlier. Higher average selling prices and volumes across product groups helped drive the move, while steel products and raw materials also posted sequential earnings growth. That helped make the report feel like a real operating improvement, not just a lucky spark from one corner of the mill.

The second-quarter outlook gave the market a reason to see the report as momentum, not just a good quarter. Nucor said it expects higher consolidated earnings in the current quarter, with improved results across all three operating segments. Steel mills are expected to benefit from higher realized selling prices with stable volumes, steel products from higher volumes on stable pricing, and raw materials from higher realized pricing. That matters because cyclical stocks do not just need a good quarter — they need investors to believe the next one is not already cooling off.

The company ended the quarter with $2.48 billion in cash, cash equivalents, and short-term investments, and its $2.25 billion revolving credit facility remained undrawn. It repurchased about 0.7 million shares during the quarter at an average price of $175.19 and still had about $3.97 billion remaining under its buyback authorization. Steel can be a brutally cyclical business, but for now Nucor’s quarter gave Wall Street the thing it likes best from a cyclical name — momentum with a balance sheet that does not look like it was assembled with duct tape.

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