Nucor(NUE.US) Q4 2023 Earnings Conference

By / / Nucor

The following is a summary of the Nucor Corporation (NUE) Q4 2023 Earnings Call Transcript:

Financial Performance:

  • Nucor reported Q4 consolidated net earnings of $785 million and an operating cash flow of over $1.5 billion.
  • The Steel Mills Group contributed $588 million of pre-tax earnings, down 33% from Q3.
  • The Steel Products segment delivered pre-tax earnings of $656 million, contributing half of the total earnings for Q4, and generated annual earnings of $3.4 billion.
  • The Raw Materials segment reported a pre-tax loss of about $14 million.
  • Nucor allocated $2.2 billion to capital spending and returned $2.1 billion to shareholders in 2023.
  • Nucor’s quarterly cash dividend was increased by 6% to $0.54 per share.
  • Debt-to-capital ratio is at 25% and debt-to-EBITDA ratio is less than 1%.
  • Shipment volumes and pricing are expected to improve in Q1 2024.
  • The company is planning higher capital spending of about $3.5 billion in 2024.
  • Nucor achieved annual earnings per share of $18 in 2023, marking its third most profitable year.
  • Over the past three years, the company generated over $30 billion in combined EBITDA and nearly $20 billion in net earnings.

Business Progress:

  • Nucor reported a record shipment year in 2023 despite labor and regulatory issues, with expected growth continuing into 2024.
  • The company launched its first 120-foot long plates to a bridge fabricator.
  • Incremental growth in the plate section is expected in 2024, albeit with a slight decline in the heavy equipment sector.
  • Customer confidence has improved due to the resolution of UAW strikes, resulting in increased shipment volumes.
  • Nucor is well-positioned to take advantage of strength in various market sectors through its range of downstream products and a strong portfolio.
  • Despite volume moderation, the company’s backlog remains healthy with pricing stabilized.
  • Nucor’s Louisiana project with ExxonMobil, which utilizes the 45Q tax credit, is forecasted to pay dividends in 2025.
  • The company is investing in nuclear fusion technology for future power supply, focusing on being an offtaker rather than building power plants.
  • Development continues in EAF steel-making capacity, with four new EAFs under construction.
  • Nucor is committed to safety, reporting the safest year in its history in 2023 and plans to achieve net zero steelmaking by 2050.
  • Nucor expects an increase in demand for American steel, driven by steel-intensive megatrends.
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