Nucor Corporation (NUE) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents mixed signals: strong demand in key sectors and strategic investments in growth areas are positive, but declining earnings, scheduled outages, and lower guidance for Q4 2025 weigh negatively. The Q&A reveals strategic expansion plans and strong demand forecasts, yet management's reluctance to provide specific future guidance could cause investor uncertainty. The market's reaction is likely to be neutral, balancing between optimism for future growth and caution due to immediate financial challenges and lack of precise guidance.
Key Financial Performance
Adjusted Earnings Per Share (EPS) $1.73 per share in Q4 2025 and $7.71 per share for the full year. The reasons for changes were not explicitly mentioned.
EBITDA $918 million for Q4 2025 and approximately $4.2 billion for the full year. The reasons for changes were not explicitly mentioned.
Reinvestment $3.4 billion reinvested into the company in 2025, with the majority allocated to projects completed in 2025 or to be completed later. The reasons for this reinvestment were to support growth and transformation.
Shareholder Returns $1.2 billion returned to shareholders through dividends and share buybacks in 2025, representing approximately 70% of net earnings. The reason for this was to balance long-term growth with meaningful shareholder returns.
Cash Position $2.7 billion in cash at the end of 2025, providing liquidity to support business and growth objectives. The reason for this was to maintain financial flexibility.
Steel Mills Segment Pretax Earnings $516 million in Q4 2025, down roughly 35% from the prior quarter. Reasons for the decline include an 8% drop in shipment volumes due to seasonal effects, fewer shipping days, and planned/unplanned outages.
Steel Products Segment Pretax Earnings $230 million in Q4 2025, down from $319 million in Q3 2025. Reasons for the decline include sequential volume declines across the portfolio, with rebar fabrication accounting for roughly half of the decline due to typical seasonal trends.
Raw Materials Segment Pretax Earnings $24 million in Q4 2025, down from $43 million in Q3 2025. The decline was primarily due to two scheduled outages at DRI facilities.
Pre-operating and Start-up Costs $496 million in 2025. The reason for this was the ramp-up of several major projects.
Capital Expenditures (CapEx) $3.4 billion in 2025, with a planned reduction to $2.5 billion in 2026. The reason for the high 2025 CapEx was the completion of several major projects.
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Operating Highlights
Rebar micro-mill in Lexington, North Carolina: Completed and on track to be fully ramped up and operating at positive EBITDA run rates within the year.
Melt shop at bar mill in Kingman, Arizona: Completed and on track to be fully ramped up and operating at positive EBITDA run rates within the year.
Nucor Towers & Structures facility in Alabama: Completed and on track to be fully ramped up and operating at positive EBITDA run rates within the year.
Galvanizing and prepaint lines at Crawfordsville sheet mill in Indiana: Completed and on track to be fully ramped up and operating at positive EBITDA run rates within the year.
New mill in West Virginia: Construction on schedule to be completed by year-end 2026, supplying advanced sheet steel for automotive, construction, and industrial customers.
Galvanizing line at Berkeley County mill: Commissioning planned for mid-2026.
Utility pole production facility in Indiana: Construction continues, expected to begin full operations in Q2 2026.
Steel imports: Foreign import share of U.S. finished steel market dropped from 25% to 14% due to Section 232 tariffs and trade rulings.
Utility transmission tower market: Expansion with four automated production sites, including a greenfield project in Utah to be completed by 2027.
Safety performance: Achieved the lowest injury and illness rate in company history for the eighth consecutive year.
Asset realignment: Converted two steel product facilities to support the Nucor Data Systems business for the data center market.
Cost structure improvement: Restructured operations and repurposed facilities to serve fast-growing markets.
Growth strategy: Invested $20 billion since 2020 in CapEx and acquisitions to grow core steelmaking capabilities and expand downstream businesses.
Trade policy: Advocating for enforcement of Section 232 tariffs and Buy America policies to support domestic steel demand.
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Risk or Challenges
Interest rate-sensitive markets: The company has not seen much improvement in interest rate-sensitive markets like automotive and residential construction, which could impact demand and financial performance.
Planned and unplanned outages: Shipment volumes declined due to both planned and unplanned outages, which affected operational efficiency and financial results.
Pre-operating and start-up costs: The company incurred $496 million in pre-operating and start-up costs in 2025, with expectations for these costs to remain elevated in 2026, potentially impacting profitability.
Steel imports and trade policy: While trade policies like Section 232 tariffs have reduced steel imports, ongoing reliance on these policies and potential changes in trade dynamics could pose risks to market stability.
Seasonal effects and fewer shipping days: Seasonal effects and fewer shipping days in the fiscal fourth quarter led to a decline in shipment volumes, impacting quarterly financial performance.
Capital expenditure and liquidity: The company has made significant capital investments, which, while aimed at growth, have resulted in negative free cash flow in 2025, raising concerns about liquidity management.
Raw materials segment outages: Scheduled outages at DRI facilities impacted the raw materials segment's earnings, highlighting operational risks in this area.
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Guidance & Outlook
2026 Domestic Steel Demand: Expected to be slightly up relative to 2025, with strength in infrastructure, data centers, energy, and energy infrastructure markets. However, interest rate-sensitive markets like automotive and residential construction show limited improvement.
Steel Mill Shipments: Projected to increase approximately 5% compared to 2025.
Backlogs: Steel mills segment backlogs are up nearly 40% year-over-year, and steel products backlogs are up 15%. Structural group backlog is more than 15% above the record set in the first quarter of 2025.
Capital Expenditures (CapEx) for 2026: Estimated at approximately $2.5 billion, with two-thirds allocated to growth-oriented investments, including the West Virginia sheet mill.
Major Projects Completion: Several projects, including the West Virginia sheet mill and galvanizing line at Berkeley County mill, are expected to be completed in 2026. The greenfield utility pole production facility in Indiana is expected to begin full operations in the second quarter of 2026.
Utility Transmission Tower Market: Third greenfield project in Utah remains on track for completion in 2027, with four automated production sites providing national coverage in this high-growth market.
Free Cash Flow: Expected to be meaningfully higher in 2026 due to lower capital spending, incremental EBITDA from completed projects, and improved market conditions.
Trade Policy Impact: Section 232 tariffs and recent trade determinations are expected to lower levels of imported steel in 2026, with foreign import share of the U.S. finished steel market projected to remain at or below 14%.
First Quarter 2026 Outlook: Higher consolidated earnings expected, driven by improved results across all three operating segments. Shipment volumes and realized pricing are anticipated to increase, particularly in the steel mills segment.
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Shareholder Return Plan
Dividends paid in 2025: $1.2 billion returned to shareholders through dividends and share buybacks, representing approximately 70% of net earnings.
Quarterly dividend increase: In December, the Board approved an increase in the quarterly dividend to $0.56 per share, extending the record of paying and increasing regular quarterly dividends for 53 consecutive years.
Share buybacks in 2025: $1.2 billion returned to shareholders through dividends and share buybacks, representing approximately 70% of net earnings.
Shareholder returns over 3 years: Over $6 billion returned to shareholders in dividends and share repurchases, equal to roughly 73% of net earnings during that time frame.
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Key Q&A
Q:What is the current view on CapEx for 2027, particularly regarding the $950 million for West Virginia in 2026 and ongoing non-expansionary CapEx?
A:The majority of CapEx in 2027 will be absorbed by the West Virginia project, which will be completed by the end of 2026. Maintenance capital, including safety, environmental compliance, and efficiency projects, is guided to be around $800 million annually due to inflation and the company's growth.
Q:Are there areas of the business where Nucor might consider expansionary capital beyond 2026?
A:Nucor is focusing on growth through megatrends such as data centers, energy infrastructure, and towers and structures. They aim to invest in countercyclical businesses and higher-value products, such as galvanizing lines in Crawfordsville and Nucor Berkeley.
Q:What is the status of the $6.7 billion through-cycle EBITDA target from the November 2022 Investor Day?
A:The $6.7 billion target is a mid-cycle guidance assuming all projects, including West Virginia, are completed. However, it is not specific guidance for 2027 as the West Virginia mill and other projects will not reach full EBITDA run rate by then.
Q:What is Nucor's spare capacity and ability to take share from imports?
A:Nucor's sheet mills are operating at about 85% utilization, providing room to contribute to the spot market and take share from imports. The West Virginia mill is expected to provide significant geographic and cost advantages.
Q:What is the expected shipment growth for 2026, and what could drive further growth?
A:Shipments are projected to increase by 5% in 2026, supported by record backlogs and strong demand in energy, infrastructure, and non-residential sectors. The start-up of new facilities is expected to further boost growth.
Q:What are Nucor's expectations around trade policy and tariffs?
A:Nucor supports banning illegally dumped subsidized steel imports and enforcing existing 232 tariffs. They advocate for strong rules of origin and enforcement of trade policies to protect U.S. manufacturing.
Q:What new products and capabilities will the West Virginia mill bring?
A:The West Virginia mill will focus on high-value products, including exposed automotive grades and consumer durables like appliances. It will also produce 1 million tons of galvanizing, targeting automotive and reshoring projects.
Q:Is there any carryover CapEx from major projects like West Virginia into 2027?
A:There will be a small amount of carryover CapEx into 2027, which is typical for large projects.
Q:What were Nucor's mill utilizations in 2025?
A:Mill utilizations were in the range of 82% to 84% in 2025.
Q:What is the expected annual growth CapEx in a more normalized environment without major projects?
A:Nucor plans to return at least 40% of net earnings to shareholders and use the remaining 60% for growth, focusing on adjacencies and Expand Beyond investments.
Q:What are Nucor's M&A priorities?
A:Nucor is focused on adjacencies with steel centricity, such as energy infrastructure, data centers, and towers. They aim to find synergies and create value for shareholders.
Q:How does Nucor view pricing policy and the risk of increased imports?
A:Nucor believes pricing is driven by demand and supply dynamics, not solely tariffs. They see strong demand in the U.S. economy and expect 2026 to be a solid year despite potential import risks.
Q:What is the incremental EBITDA contribution from completed projects in 2026?
A:The incremental EBITDA contribution from recently completed projects and progress at Brandenburg is expected to be about $500 million in 2026 compared to 2025.
Q:What is the current state of the plate and rebar markets?
A:The plate market is strong, with backlogs up 40% year-over-year and robust demand in energy and infrastructure. The rebar market is supported by record backlogs, and the Lexington and Kingman facilities are expected to be fully ramped by the end of 2026.
Q:Review of Unclear Management Responses
A:Management avoided providing specific guidance for 2027 EBITDA, stating that the $6.7 billion target from the 2022 Investor Day was mid-cycle guidance and not specific to 2027. They also did not provide exact figures for annual growth CapEx in a normalized environment, instead emphasizing their commitment to long-term growth and shareholder returns.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Alabama galvanizing
America effort
America use
Buy America
CEO call
CFO successor
COO CFO
Canada steel
Chair CEO
Chairman CEO
Chief Officer
Commerce International
Commission ruling
Congratulations contribution
Core Culture
Crawfordsville sheet
Culture steel
Instructions
Laxton President
Nucor CEO
Nucor Review
Officer year
Section tariff
commitment
completion
credit profile
defense
determination
government
greenfield
improvement
majority
opportunity
rebar
role
safety
steel market
tariff trade
teammate
trade case
trade policy
utility
year Nucor
NUE Transcript
Nucor Corporation (NUE) Q4 2025 Earnings Call Transcript
Unknown1-27
The earnings call presents mixed signals: strong demand in key sectors and strategic investments in growth areas are positive, but declining earnings, scheduled outages, and lower guidance for Q4 2025 weigh negatively. The Q&A reveals strategic expansion plans and strong demand forecasts, yet management's reluctance to provide specific future guidance could cause investor uncertainty. The market's reaction is likely to be neutral, balancing between optimism for future growth and caution due to immediate financial challenges and lack of precise guidance.
Nucor Corporation (NUE) Q3 2025 Earnings Call Transcript
Positive10-28
The earnings call summary and Q&A session reveal strong demand in key market segments, strategic production ramp-ups, and positive outlooks for new facilities. Despite some margin compression and higher conversion costs, the overall sentiment is positive, driven by robust market demand, strategic positioning in data centers, and a commitment to shareholder returns. The potential for growth in export markets and new projects further enhances the positive outlook.
Nucor Corporation (NUE) Q2 2025 Earnings Call Transcript
Positive7-29
The earnings call highlights strong financial performance, with significant increases in net earnings and pretax earnings across segments. Management provided optimistic guidance, expecting higher earnings in Q2 and robust demand. Despite some margin compression concerns, the company's strategic investments and debt management are positive signals. The Q&A section reinforced confidence in future growth, with no major risks identified. Overall, the sentiment leans positive, reflecting strong earnings and management's optimistic outlook, likely leading to a stock price increase in the short term.
Nucor Corporation (NUE) Q1 2025 Earnings Call Transcript
Unknown4-29
Despite some positive indicators like capital investments and shareholder returns, concerns such as lower EBITDA, higher operating expenses, and lack of clear guidance overshadow potential gains. The Q&A section highlighted management's reluctance to provide quantitative guidance, which typically raises investor concerns. While there is optimism about demand, market uncertainties and pre-operating costs present risks. The sentiment is balanced by positive pre-tax earnings in key segments and a strong cash position, resulting in a neutral outlook.
NUE Slides
NUE Report
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