Nucor Corporation, a steel manufacturer company and North America’s largest recycler, reported a decline in net earnings and sales during the third quarter compared to a year ago but beat Wall Street’s expectations.
For the third quarter, Nucor delivered consolidated net earnings of $193.4 million, or 63 cents per diluted share, compared to consolidated net earnings of $275 million, or 90 cents per diluted share, in the same quarter a year ago. Analysts had expected earnings of 51 cents per diluted share.
The company posted consolidated net sales of $4.95 billion in the quarter, down 10 percent from the $5.46 billion reported in the same quarter a year ago. Analysts had expected revenue of $4.54 billion.
However, the third-quarter results improved from the second quarter, which saw consolidated net earnings of $108.9 million, or 36 cents per diluted share. Net sales improved 14 percent from the $4.33 billion posted in the second quarter.
“I am incredibly proud of how our team has responded to the many challenges of 2020 beginning with the health, safety and well-being of our entire Nucor family. Our third quarter results were better than we expected, reflecting continued strength in nonresidential construction. We expect improved performance in the fourth quarter due to positive pricing momentum in sheet and plate markets. Our teammates across the company continue to find unique ways to serve our customers while bringing innovative product solutions into the market,” CEO Leon Topalian said in the release.
According to the release, the nonresidential market “remained strong,” while the automotive sector’s recovery “accelerated.” The company also pointed to an improvement in its steel mills segment, particularly bar and structural mills, while sheet and plate mills “remain challenged.”
In terms of outlook, Nucor said the uncertainty from the COVID-19 pandemic makes it challenging to forecast future market conditions and demand trends accurately.” That said, the company expects higher earnings in the fourth quarter, driven by “improved pricing” at its sheet and plate mills. The company also expects the raw materials segment to show increased earnings because of improved margins at its direct reduced iron facilities.
At the end of the quarter, Nucor had $3.41 billion in cash and cash equivalents, short-term investments, and restricted cash and cash equivalents on hand. The company also noted that it maintains the strongest credit rating in the North American steel sector (Baa1/A-) with stable outlooks at Moody’s and Standard & Poor’s.
Shares of Nucor (NUE) were last trading up 15 cents, or 0.31 percent, near $50.05 on Friday.
