Transcript: Nucor Q2 2026 Earnings Conference Call

Nucor (NYSE: NUE ) held its second-quarter earnings conference call on Tuesday. Below is the complete transcript from the call. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

04 per share, excluding a non-cash benefit. 84 per share. 5 billion in 2026, with 60% allocated to growth projects. 1 million tons, and significant growth in steel products, particularly in the Tubular Group.

Demand for steel and steel products remains strong across key markets, and the company is benefiting from investments in its core steelmaking capabilities. Strategic initiatives include progress on the West Virginia sheet mill, expected to ramp up significantly by 2028, and ongoing investments in other major capital projects. Management highlighted the impact of trade policies, including Section 232 and USMCA, on reducing unfairly traded steel imports and supporting domestic producers. The company expects continued strong demand and shipment growth, targeting the higher end of a 5-10% growth range for 2026, driven by robust end-market conditions.

Nucor plans to focus future growth investments on megatrends like energy infrastructure and reshoring, while maintaining discipline in capital allocation. The call conveyed optimism about future financial performance and strategic positioning, emphasizing Nucor's broad capabilities and strong execution. Full Transcript OPERATOR Good morning and welcome to Nucor's second quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise and today's call is being recorded.

After the speakers' prepared remarks, I will provide instructions for callers wishing to ask questions. I would now like to introduce Chris Jacoby, Director of Investor Relations. You may begin your call. Chris Jacoby, Director of Investor Relations Thank you and good morning, everyone.

Welcome to Nucor's second quarter earnings review and business update. Leading our call today is Leon Topalian, Chair and CEO, along with Steve Laxton, President and COO, and Jack Sullivan, CFO. Other members of Nucor's executive team are also here with us today and may participate during the Q&A portion of the call. Yesterday we posted our second quarter earnings release and investor presentation to Nucor's IR website.

We encourage you to access these materials as we will cover portions of them during the call. Today's discussion will include the use of non-GAAP financial measures and forward-looking information within the meaning of securities laws. Actual results may be different than forward-looking statements and involve risks outlined in our safe harbor statement and disclosed in Nucor's SEC filings. The appendix of today's presentation includes supplemental information and disclosures along with a reconciliation of non-GAAP financial measures.

So with that, let's turn the call over to Leon. Leon Topalian, Chair and CEO Thanks, Chris. And before discussing the quarterly results, I want to begin with the most important measure of our performance and our greatest value, safety. Earlier this year we launched our Safest Summer Ever initiative because we know that the summer months can present additional risks.

As we move into August, I'm pleased to say that we're on pace to not only make this the safest summer in Nucor's history, but also the safest year as well. While I'm proud of our progress, our job isn't finished. Let's remain focused and make sure every one of our teammates goes home safely at the end of every shift. Turning to our financial results, Nucor delivered another strong quarter with improved earnings across all three operating segments.

20. 84 per share. During the quarter, we returned $479 million to Nucor shareholders through dividends and share buybacks, representing 41% of our net earnings. 5 billion for the year, with about 60% of that allocated toward growth projects.

Moving to our operational performance, demand for steel and steel products remains strong across most of our key end markets, and our teams continue to execute exceptionally well. 1 million tons. This is the second straight quarter we've set a new record. We're seeing strength across all of our product categories and are benefiting from the investments we've made to grow our core steelmaking capabilities over the past few years.

In particular, I want to recognize our team at Brandenburg, which shipped more than 230,000 tons this quarter, leading to another quarterly shipment record in plate. In steel products, shipments were up 11% versus Q1, with growth across all major products in the portfolio. This performance was led by our Tubular Group, which posted a second consecutive quarterly shipment record and strong earnings. And even as our shipments grow, our backlogs continue to build.

This reflects the business momentum we are seeing from our customers across a broad set of sectors in the economy. Our team is executing at a very high level right now. Execution is critical, but so is having a level playing field. While we saw an increase from the first quarter, finished steel imports are down 25% year over year due to the strengthening of the Section 232 program along with anti-dumping and countervailing duties on corrosion-resistant steel and other steel products.

The impacts are real and they are measurable. S. market. Earlier this month, as expected, the Trump administration announced it has opted not to renew the USMCA trade agreement unless changes are made.

This decision triggers an annual review process that provides a real opportunity to improve demand for North American content while closing loopholes that operate to the detriment of the American industry. One important change we hope to see is a requirement that all steel used in any steel or steel-intensive products must be melted and poured in North America to qualify as USMCA compliant. We also believe the North American steel purchasing requirement for automotive products should be increased, with a melted and poured requirement effective immediately.

Finally, a renewed agreement should require Canada and Mexico to take additional steps to prevent excess capacity from non-USMCA economies, particularly China, from entering North American supply chains and undermining our industries and workers. S. Trade Representative is currently conducting investigations under Section 301. We support the administration's use of tools like these to level the playing field for American manufacturers and achieve balanced trade.

We also commend the administration's decision to act consistently with the Section 232 program and exempt vital steelmaking inputs and raw materials from the final action in the Brazil Forced Labor 301 investigations. We urge the administration to do the same in all other 301 investigations. These are more than simply trade policy priorities; they're investments in America's long-term industrial strength. With our nation recently celebrating its 250th anniversary, it's worth remembering that America's success has been built not only on freedom, but also on the ingenuity, resilience and productive capacity of American manufacturing.

A robust industrial base has always been essential to our economic prosperity and our national security. For generations, steel has been the backbone of America's growth, security and prosperity, and it will remain essential for generations to come. At Nucor, we are proud to help build the bridges, buildings, energy infrastructure, manufacturing facilities and defense capabilities that keep our country strong. With that, I'll turn it over to Steve for an update on our growth initiatives and market outlook.

Steve Laxton, President and COO Thank you, Leon, and thank you all for joining us this morning. Our team is continuing to make great progress at our new sheet mill project in West Virginia. We remain on time and on budget with continued excellent safety performance. The team has achieved several important milestones over the past two months.

In June, we ran our first coil through the pickle line, and earlier this month we began commissioning of the melt shop and both the automotive and construction GALV lines. Later this year, we will expand that to the cold mill and hot mill, keeping us on track to complete commissioning, inspection and testing of equipment across the mill by the end of the year. Our startup plan is unchanged. Following commissioning, our priority will be to operate safely and reliably as commercial shipments begin to ramp in early 2027.

Capacity, utilization and product offerings will be building steadily throughout 2027 and into 2028. In addition to West Virginia, we're making steady progress across our other major capital projects that are either under construction or ramping up. On the construction front, we expect to complete our Berkeley GALV line, the full range of our Crawfordsville coating operation and Indiana Towers and Structures facility later this year. We also expect our Utah Towers and Structures facility to reach full production by mid-2027.

Turning to our recently completed growth projects, we continue to advance their strategic and commercial plans. Many of these projects, including our Lexington Micro Mill and our Kingman Melt Shop, reached EBITDA-positive run rates during the first quarter, while others, like our Alabama Towers and Structures facility, are expected to reach EBITDA-positive later this year. Across these projects, performance has improved steadily throughout the year and we expect that trend to continue as they ramp to their full run rates. Leon spoke earlier about the operational results in our steel mill and our steel product segments.

Building on that, I'd like to share how we're thinking about the current market environment and outlook for each of our businesses. Overall, the strength we see across a broad set of end markets is very encouraging. We now expect shipment growth to finish closer to the higher end of our previously suggested 5 to 10% range for 2026. Beginning with flat products, we've seen double-digit shipment growth in both our sheet and plate groups in the first half of the year.

Within sheet, underlying demand is strong and we expect that to continue into 2027, led by energy, advanced manufacturing and data centers. In plate, although domestic consumption has moderated from the 2025 levels, demand remains healthy across many important end markets while imports have fallen significantly. That backdrop, combined with our expanded plate capabilities, positions us well heading into the second half of the year. Moving to long products, our bar and structural mills have also seen a meaningful step up in shipments year to date.

In our bar group, rising rebar demand reflects a sustained multi-year construction cycle, with energy infrastructure, advanced manufacturing and data centers more than offsetting softness in residential construction. In structural, domestic consumption has increased approximately 15% this year, fueled by data centers and other megaprojects, while higher imports have absorbed some of that incremental demand. Our backlogs are up significantly compared to prior years and we expect that strength to carry into next year. Nucor is unparalleled in its geographic reach, product diversity and size.

These factors are allowing our team to optimize at scale to more effectively and more efficiently meet customer needs. Finally, our steel products segment represents one of the broadest and most diverse portfolios of steel construction products in North America. Throughout these businesses we're seeing many of the same demand drivers as in our steel mill segment, with order visibility extending into 2027 for many products. Looking to the second half of the year, we expect continued momentum across our steel products group along with further margin expansion over time as higher realized pricing more than offsets higher steel input costs.

With that, I'll turn it over to Jack for a closer look at our second quarter financial results and our outlook for the third quarter. Jack Sullivan, Chief Financial Officer Thanks, Steve, and good morning, everyone. 20 related to an increase in the value of our Helion investment. 84 per share.

The beat relative to our mid-quarter guidance was largely due to better-than-anticipated results in our steel mills segment, with many divisions outpacing their June forecast. Steel products and raw materials segments also came in ahead of forecast. Let me now review our second quarter performance by segment. 6 billion of pre-tax earnings, an increase of more than 35% from the prior quarter.

Higher average selling prices, especially in our sheet and plate groups, were the largest drivers of the quarterly increase, and even with three fewer calendar days compared to the prior quarter, Q2 shipments for the steel mills segment grew slightly. The results also reflect $130 million of cash refunds associated with prior-period raw material procurement costs, primarily related to pig iron. Turning to steel products, we generated pre-tax earnings of $353 million, up more than $75 million from the first quarter. Volumes increased 11% on stable pricing, with the volume growth occurring across all of our major product lines.

And in our raw materials segment, we generated pre-tax earnings of $146 million compared to $45 million in the prior quarter, reflecting higher volumes and improved margins. S. We also saw improved performance in our scrap processing operations. Pre-operating and startup costs totaled $120 million for the quarter.

We expect these costs to remain elevated through the rest of 2026 and throughout 2027 as we complete construction and ramp up production at our greenfield sheet mill in West Virginia. Turning to the balance sheet and capital allocation, our strong investment-grade credit profile has long been central to Nucor's success, enabling us to consistently invest in growth while delivering meaningful returns to shareholders. 4 billion. Total debt as a percentage of capital sits at 23%, and our credit ratings remain the strongest of any North American steel producer.

During the quarter, we generated $829 million in free cash flow, our strongest quarter since 2023, as higher earnings drove improved cash from operations and capex moderated to $571 million. We also returned $479 million to shareholders through dividends and share repurchases, an increase of more than $200 million from the first quarter and representing 41% of quarterly net earnings. Consistent with our capital allocation framework, we remain committed to returning at least 40% of net earnings to shareholders on an annual basis. 2 billion in capex, with most of that going toward growth projects.

Taken together, more than 75% of the capital we've allocated this year has gone directly to shareholder returns and growth investments. Looking forward, we expect free cash flow to continue to inflect higher as these growth projects come online and capex moderates. Turning to our third quarter outlook, we expect higher consolidated earnings for the steel mill segment. In contrast to the second quarter, we do not expect any further cash refunds to materially benefit us in the third quarter or beyond.

Even without that benefit, we expect higher third quarter segment earnings from expanding metal margins and stable volumes. The margin improvement reflects higher realized pricing across all product groups. In steel products, we expect increased earnings from higher volumes and higher average realized pricing. In raw materials, we expect lower earnings primarily due to lower margins resulting from lower expected realized scrap pricing and elevated iron ore costs due to the idling of some pellet capacity in the Middle East.

As we look to the second half of 2026, we're encouraged by strong demand across key end markets, growing contributions from our recent investments, and federal policies that support a healthy domestic steel sector with the broadest range of capabilities in the North American steel market. The Nucor team is well positioned to create value for our customers and shareholders. And with that, we'd like to hear from you and answer any questions you may have. Operator, please open the line for questions.

OPERATOR We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star-one to raise your hand.