Nucor Corporation recently released its Annual Report on Form 10-K for the year ended December 31, 2023, providing a comprehensive overview of its financial performance and operational highlights. Nucor is a leading steel and steel products manufacturer, operating in three segments: steel mills, steel products, and raw materials. The company's steel mills segment produces a range of steel products, including hot-rolled, cold-rolled, and galvanized sheet steel, while the steel products segment offers steel joists, decks, and other structural steel products. Nucor's raw materials segment produces direct reduced iron (DRI) and brokers ferrous and nonferrous metals.
In the "Management’s Discussion and Analysis of Financial Condition and Results of Operations" section, Nucor highlighted several key factors impacting its performance in 2024. The company noted that while the U.S. economy and consumer confidence remained resilient, steel market demand softened, particularly in high interest rate-sensitive construction sectors, and due to economic and political uncertainty in the run-up to the presidential election. Additionally, legislation providing funding for infrastructure projects and clean energy initiatives was expected to impact the steel market, but the effects were taking longer than anticipated.
Nucor also outlined the challenges and risks it faces, including global steel production overcapacity, circumvention of trade duties, and the volatility of its principal raw material, ferrous scrap. The company emphasized the importance of effectively managing raw material prices and market conditions to maintain profitability.
The report provided an in-depth evaluation of Nucor's operating performance, focusing on its three segments: steel mills, steel products, and raw materials. It highlighted a decrease in consolidated net earnings to $2.03 billion in 2024, compared to $4.53 billion in 2023. The steel products segment experienced decreased average selling prices and lower volumes, contributing to the overall decline in earnings. Nucor's net sales to external customers decreased by 11% in 2024, with average sales price per ton decreasing by 10% and total tons shipped to outside customers decreasing by 2%.
The report also detailed the performance of each segment. Net sales for the steel mills segment decreased by 7%, primarily due to lower average selling prices, while net sales for the steel products segment decreased by 21% due to both lower average selling prices and decreased volumes. In contrast, net sales for the raw materials segment increased by 3% in 2024, primarily due to increased volumes at the company's brokerage operations.
The market has reacted to these announcements by moving the company's shares 0.2% to a price of $134.9. For the full picture, make sure to review Nucor's 10-K report.
