Pavel Ignatov/Adobe Stock
For those wondering how the surge in domestic steel prices have impacted many domestic steelmakers, there is perhaps no better indicator of that impact than quarterly earnings reports.
Steelmaker Nucor Corporation reported its third-quarter earnings late last week, reporting net earnings of $676.6 million. That total is up from $254.9 million in Q3 2017, but down slightly from Q2 2018’s $683.2 million.
In addition, through the first nine months of the year, Nucor reported net earnings of $1.71 billion, up significantly from the $934.8 million reported for the first three quarters of 2017.
“The strong financial performance we have had this year continued into the third quarter, and we are on pace for 2018 to be a record year for earnings,” Chairman, CEO and President John Ferriola said in a release. “Our financial results are evidence that Nucor was primed and ready for this long-awaited upturn in the steel market. Our strategic initiatives, including capital projects, acquisitions and enhanced customer engagement, as well as our active participation in industry trade actions, have solidified our industry leading performance. Our extensive investments have grown our peak earnings power and enhanced our many competitive strengths.”
Rising steel prices have uplifted U.S. steel companies this year, with many committing to significant operational investments.
In September, Nucor’s board of directors approved a $650 million investment aimed toward expanding its flat-rolled sheet steel mill in Ghent, Kentucky. According to the firm, the investment would increase the mill’s capacity from 1.6 million to 3 million tons.
Looking ahead to the fourth quarter, Nucor projects earnings to decline compared with the third quarter, but also expects them to exceed Q4 2017 earnings.
“However, we expect the fourth quarter of 2018 to be another strong quarter as we believe earnings will be noticeably higher than those generated in the fourth quarter of 2017,” the Nucor release states. “We continue to believe there is sustainable strength in steel end use markets.”