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Employees say:&nbsp;"Working at Nucor, you hear on day one, 'we are a family.' Often that seems like lip service at other facilities or entities, but at Nucor, I was able to experience this firsthand. I lost a cherished loved one and my plant manager didn't care about days missed, work not being completed, or productivity; he cared about my kids and how they would be impacted. He wanted to know if we had food at the house or a cleaning service while we were grieving. He wanted to ensure for the holidays we were together and that they enjoyed their holiday break. He cared about ME. That spoke volumes to the level of care this company—this family displayed for my family at home."

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Nucor is the largest steel manufacturer and recycler in North America. The company, founded in 1905, produces a variety of steel sheet products, bar products, and more through its steel mills segment, which serves steel service centers, fabricators, and manufacturers across North America. Nucor also operates through its steel products and raw materials segments. In addition to production, the company is involved in the steel trading, rebar distribution, and piling distribution businesses.

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Nucor (NUE): Company Profile, Stock Price, News, Rankings

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Nucor

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Good morning, and welcome to Nucor's First Quarter twenty twenty five 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 Jack Sullivan, Vice President of Nucor Investor Relations. You may begin your call.

Thank you, and good morning, everyone. Welcome to Nucor's first quarter twenty twenty five earnings review and business update. Leading our call today is Leon Topalian, Chair, President and CEO along with Steve Laxton, Executive Vice President and CFO. Other members of Nucor's executive team are also here with us today and may participate during the Q and A portion of the call. Yesterday, we posted our first 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.

Jack. Before we discuss the quarterly results, I'd like to acknowledge the important contributions of two retiring executive team members. Chad Udermark, our EVP of New Markets and Innovation will retire in June after more than three decades with Nucor. Chad has exemplified the Nucor culture and has positively impacted thousands of team members during his tenure. His leadership in executing our expand beyond strategy and driving key acquisitions has been invaluable.

We extend our best wishes to Chad and his family in his retirement. Additionally, Greg Murphy, our EVP of Business Services and General Counsel will also retire in June. Since joining Nucor in 2015, Greg has provided exceptional leadership and his impact in advocacy leading our legal, environmental, government affairs and communications teams has been instrumental in developing long term strategies that serve our shareholders, customers and our team. So on behalf of our more than 32,000 team members, thank you both for all of your leadership, friendship and dedication to Nucor. You will be greatly missed.

With Greg's retirement, Ben Pickett has also been promoted to EVP of Business Services and Doug Wilner has been promoted to President of Corporate Legal Affairs and General Counsel. And just last week, we announced Tom Batterbee will be promoted to EVP of Human Resources and Talent effective May 11. Tom is an exceptional leader with more than thirty five years of service with Nucor. In his new role, Tom will drive Nucor's strategy for the growth, retention and development of all Nucor team members. Please join me in giving a warm welcome to Ben, Doug and Tom in their new roles.

Turning now to our first quarter results. Nucor generated EBITDA of $696,000,000 and earned $0.77 of adjusted EPS. Despite the lower results compared to prior quarters, Nucor's strong balance sheet and deep liquidity allowed the company to advance its long term growth plans on a number of fronts. During the quarter, we reinvested nearly $860,000,000 into the company with approximately two thirds of that going into projects that will commence operations over the next two years. We've returned nearly $430,000,000 of capital to Nucor shareholders.

We've pre funded upcoming debt maturities, raising $1,000,000,000 in new senior notes with a weighted average coupon of 4.88% and took steps to wind down or repurpose certain operations at divisions where we believe resources can be allocated more efficiently. Through it all, we've continued to live our culture, taking care of our team, customers and shareholders. The capital projects we've undertaken are designed to strengthen and diversify our earnings profile for shareholders and better serve the evolving needs of our customers. Several of these projects will commence operations within the next twelve months and I'd like to take a moment to provide an update on them. Within the bar mill group, our rebar micro mill in Lexington, North Carolina rolled its first billet in April and is on track to produce its first heat in June.

Commercial shipments are expected to occur in the third quarter. At our Kingman, Arizona bar mill, we expect the new melt shop to produce its first seed in June and be operational in the third quarter. We've also made considerable headway with new coating facilities at our existing sheet mills. The coating complex at our Crawfordsville, Indiana sheet mill is scheduled to be completed by year's end and will add galvanizing and prepaying capabilities at the location. Additionally, the new galv line at our Berkeley County Sheet Mill in South Carolina is on track to completion by mid-twenty twenty six.

Within our Towers and Structures business, the Greenfield projects in Alabama and Indiana will commence operations throughout the next nine months. Customers have already started to tour Alabama location and we were working through initial phases of the qualification process. The Alabama project is slated to begin operations in the third quarter of this year and the Indiana project is on track to begin operations in the first quarter of twenty twenty six. While construction on our West Virginia sheet mill will continue through 2026, the team there continues to do a great job of moving the project forward. We're near the midpoint of construction timeline and equipment installation is well underway.

We remain on schedule to commission the mill by the end of next year and look forward to supplying the markets with some of North America's cleanest and most advanced sheet steels. Over the past several months, we've seen significant changes in federal trade policy, including the Welcome Marine Statement and broadening of Section two thirty two steel tariffs. Since its implementation in 2018, the two thirty two tariffs have been significantly weakened through country exemptions, quotas and numerous product exclusions. By 2024, fewer than 18% of steel imports were subject to Section two thirty two tariffs. Ending the exclusions in quarter agreements was necessary to strengthen The U.

S. Steel industry, which was the original goal of the two thirty two tariffs. We have always maintained the belief that America's national security depends on a robust and healthy American steel industry. As America's largest and most diversified steel producer, we applaud recent steps to help level the playing field for American steel producers. In addition, the trade case relating to certain corrosion resistant steel products continues to progress.

Earlier this month, the Department of Commerce announced preliminary anti dumping duties on coated flat rolled steel from 10 countries. Many of our country's trading partners have taken advantage of our open markets for far too long to the detriment of the American manufacturer and their teams. These trade remedies as well as the comprehensive section two thirty two tariffs are the sort of enforcement mechanisms required to stop unfairly traded imports. For nearly thirty years, Nucor has worked across administrations to ensure strong trade law enforcement, and we will continue to be outspoken on these issues so long as there are trading partners who do not play by the rules of free and fair trade. When speaking to investors over the past several weeks, we've heard a lot of questions about the outlook for steel demand in light of macroeconomic uncertainty and volatility.

So let me spend a few moments describing what we're seeing and what we're focused on. For starters, in the first quarter, we saw backlogs rise over 30% in our steel mill segments and rise nearly 25% in steel products. We recognize a portion of this may be pulled forward. However, we continue to see very healthy order entry rates and relative stable pricing. We're also seeing an administration that seeks less regulation, a lower corporate tax rate and has demonstrated a willingness to pivot and course correct as conditions evolve.

We're seeing steady to improving demand for steel among customers who are engaged in the reassuring, rebuilding and repowering of American industry. And Nucor is best positioned to supply these growing markets as evidenced by our order books, which include projects like the advanced manufacturing facilities, infrastructure projects, new hospitals, schools, airports, power plants and stadiums. Overall, we continue to see the current improving demand environment in line with our expectations in 2025. And when you couple that with Nucor's product breadth and capabilities paired up with recent policies in support of U. S.

Manufacturers, it's hard not to be optimistic about Nucor's future. While the economy is grappling with a lot of uncertainty and volatility, rest assured Nucor is built for this. We have the right capabilities, the right team, and the right financial strength to preserve regardless of the macroeconomic trends. Our mission to grow the core, expand beyond and live our culture is how we plan to succeed, but all this requires execution. It's through great execution that Nucor turns potential into value creation for our shareholders and our customers.

And that's why my most important message to the team during this period of transformative growth is to stay focused and accountable as we bring new projects to life across the enterprise. Before handing it over to Steve, I want to mention that we recently posted our 2024 corporate sustainability report to the Nucor website. We're proud to share that our greenhouse gas emission intensity is among the lowest in the global steel industry and we believe demand for cleaner steels will continue to grow. The report highlights how we're advancing the development of cleaner energy sources such as nuclear energy as well as carbon free iron sources and other low carbon raw materials. The report also highlights impressive progress our team has made in reducing injuries over the last several years.

I'd encourage you to look through it and learn more about how our team is working to care for one another, the environment and the communities we call home. With that, I'll turn it over to Steve, who will provide more details about our performance in the first quarter and our outlook for the second. Steve? Thank you, Leon, and thank

you all for joining us on the call this morning. During the first quarter, Nucor generated net earnings of $156,000,000 or $0.67 per share. This includes pretax charges of $29,000,000 or $0.10 per share of after tax charges related to the closing or repurposing of facilities in our steel products segment and ceasing production of wire rod at our Connecticut bar mill. Excluding these one time charges, our annual earnings were approximately $179,000,000 or $0.77 per share. Leon highlighted the progress we've made on several of our larger growth initiatives.

While these growth investments create long term shareholder value, they also create near term earnings headwinds. During the first quarter, Nucor incurred $170,000,000 or $0.56 per share in pre operating and startup cost. Turning to the segment level results for the quarter and adjusting for the one time charges just mentioned, the steel mill segment generated adjusted pre tax earnings of $241,000,000 increasing approximately 43% from the prior quarter. While average realized prices were roughly in line with the fourth quarter prices, volume increased 14%. The most pronounced increase came from the bar mill group where shipments rose 21% compared to the prior quarter and 20% year over year.

We also saw improvement in plate shipments driven by a combination of good customer demand and improved operations at our Brandenburg, Kentucky plate mill. Brandenburg shipments and production have trended higher for five consecutive quarters, a testament to the progress of that team. While shipments were higher during the first quarter, we were also booking at healthy levels. As Leon mentioned previously, our steel mills backlog grew more than 30% throughout the quarter and sits up nearly 25% over this time last year. Nucor's steel product segment affords a wider and more diverse set of solutions than others in our industry.

That capability breadth is a meaningful differentiator and value creator. The segment continues to deliver pronounced impacts The Steel Products segment generated adjusted pretax earnings of $3.00 $7,000,000 for the first quarter. Steel Products also saw meaningful backlog growth, up nearly 25% across all downstream products for the quarter. Our joist and deck backlogs now extend into the fourth quarter.

As we've shared in the past, the longer duration backlogs for some products within this segment mainly experience a lag between pricing changes in the market and realized financial results. And we're seeing this effect now and expect lower realized pricing in our financial results for some of these businesses in coming months. But it's important to note that we expect margins in this backlog to remain well above pre pandemic levels. Given where backlog set, broader coverage under Section two thirty two and our healthy current order book, we have a constructive view on the steel product segment for the balance of 2025. Since 2022, we've made several acquisitions to expand our construction products capabilities that leverage our company's core competency as an efficient manufacturer.

These acquisitions and subsequent organic growth investments have established four distinct platforms with higher growth and margin potential for our shareholders. During 2024, our overhead doors, racking and insulated metal panels platforms generated EBITDA of approximately $400,000,000 when analyzing for mid year acquisitions. For 2025, we expect these three platforms will generate approximately $450,000,000 in EBITDA with further growth expected in 2026 when our new towers and structures facilities enter their first full year of production. Turning to our raw materials segment, we realized pretax earnings of approximately $29,000,000 for the quarter, a decrease of approximately $28,000,000 from the fourth quarter. Lower realized pricing for DRI and higher operating expenses in some of our scrap processing operations were the primary factors affecting the quarter over quarter change.

Moving to the balance sheet. We remain committed to maintaining a strong investment grade credit quality. A healthy balance sheet with ample liquidity has been a hallmark of Nucor for decades and continues to put the company in a position of strength allowing us to execute our strategy throughout various phases of the economic cycle. In March, Nucor increased its revolving credit facility by $500,000,000 and we raised $1,000,000,000 of senior notes at a weighted average coupon of just under 4.9%. This $1,000,000,000 offering was split evenly across five and ten year tenors with proceeds being used to retire $1,000,000,000 of notes that reached final maturity in late May and early June.

The rating agencies continue to affirm our investment grade credit rating outlooks. Our ratings are the highest of any North American steel producer with an A- rating and stable outlooks from both S and P and Fitch and a Baa1 rating on positive outlook from Moody's. Nucor ended the first quarter with a total debt to capital of approximately 27% and just over $4,000,000,000 in cash. However, as just mentioned, we intend to use $1,000,000,000 of the cash recently raised from our debt offering to retire debt. So adjusting for this intended use, Nucor would have debt to capital of just under 25% more in line with recent periods and cash of just over $3,000,000,000 In addition to maintaining a strong balance sheet, the cornerstone of Nucor's capital allocation framework is to provide meaningful direct returns to shareholders.

During the first quarter, that principle was on display as we returned $429,000,000 to shareholders in the form of dividends and share repurchases. Leon spoke earlier about our outlook, but now I'd like to drill deeper on what we're seeing across some of our businesses. Within sheet, we're seeing continued resilient demand from key end use markets like construction and energy. Our sheet backlog grew meaningfully during the first quarter and we expect our second quarter shipments to increase further. The effects of the core's trade case coupled with the recent Section two thirty two refresh should temper unfairly dumped and predatorily priced materials allowing for improved stability in the sheet business.

Turning to bar, while there's potential concern that some of the commercial construction planning may be pausing in response to recent market volatility, larger projects in advanced manufacturing, infrastructure and institutional construction remain largely unaffected and continue to represent steady business for us. Consequently, we see improved financial performance in bar in the second quarter. Imports were meaningfully higher during the first quarter reflecting front running of tariffs. Within our plate and structural groups, some of the same demand drivers are having a positive impact. Nucor is a leading supplier to structural fabricators and we saw higher shipments for projects ranging from data centers and warehouses to bridges and other infrastructure projects.

New energy related projects are also driving demand. We're supplying piling for solar farms, plate for onshore wind and transmission towers and getting qualified to supply steel for API grade line pipe out of Brandenburg. Our backlogs are up significantly in both beam and plate and we expect strong shipment levels and stable pricing to continue into the second half of this year. And in the steel products segment, our backlogs are up year over year by 19%. Highlighting a few of our larger businesses within that segment, we expect continued strong performance from joists and deck and strengthening performance from our tubular and metal buildings groups.

Positive construction trends on growing data center demand, stable warehouse activity and ongoing institutional construction are driving backlog growth. In addition, operational gains in our Tubular and Metal Buildings group coupled with lower imports for Tubular are setting this up for positive momentum in coming months. Turning to our second quarter twenty twenty five outlook, we expect Nucor's earnings to be meaningfully higher than in the first quarter of this year. Operating results at the Steel Mills, Steel Products and Raw Materials segments are all expected to be stronger than the first quarter. The Steel Mills segment is expected to drive the largest portion of this sequential earnings growth due to stable volumes and higher realized pricing.

Within this segment, new core sheet and plate business are expected to drive the majority of the increase. In the steel product segment, we expect higher volumes and improved cost to more than offset slightly lower realized pricing. In our Raw Materials segment, we expect volumes to remain flat along with moderating scrap pricing and stable realized DRI pricing. We also expect sequential cost improvements within our scrap processing operations. As we look further into 2025, our expectations for demand remain generally in line with the optimism we shared on our year end earnings call.

We still expect to see growth in domestic steel demand this year, and we're confident in our ability to capture a healthy share of that demand with the best and most diverse range of solutions in the marketplace. And with that, we'd like to hear from you and answer any questions you may have. Operator, please open the line for questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Your first question comes from Lawson Winder, Bank of America Securities. You may now speak.

Thank you very much operator and good morning Leon and good morning Steve. Nice to hear from you both. Thank you for the update. Steve on the last call you provided some guidance in terms of or some backward looking guidance in terms of what the startup costs were in 2024 and mentioned that we should consider those startup costs in 2025. Can you provide any color on the magnitude of what those startup costs might look like this year heading to the balance of this year, particularly with the benefit of now having four solid months behind you?

Hey, Lawson, that's a great question. What you will see for the balance of the year is probably very similar to what we had last year. So for your purposes of bottling out the next couple of quarters, I would pencil in something close to what we've done in the last few quarters. Just for a reminder, we had $160,000,000 and $164,000,000 in the last couple of quarters and $170,000,000 this past quarter. So we're in a heavy period of both capital spending and ramping up of new projects.

We've got as Leon highlighted in his opening remarks, we've got five projects coming online this year. We're excited about those. But part of the part of that calculation is the ramp rate on the start ups as well. So So something similar to last year is what you should expect.

Okay. That's extremely helpful. Also when you think about Brandenburg, where what are you guys penciling in for utilization at year end twenty twenty five?

Austin, it's Leon. Look, I would tell you, we couldn't be more proud of what the team has done in Brandenburg and their ramp. I'm going ask Brad to touch on just a few of the details because I think they're worth highlighting some of the very specifics that they've been able to achieve in the recent months. Brad, why don't you provide some details there?

Yes. Thanks, Leon. As we mentioned on the last earnings call, we're very confident in getting to EBITDA positive run rates by this summer, and we remain confident we're on track for that. My confidence really stems from what the team has been able to achieve there. We've seen record days, record weeks, record months in production, in quality and shipments, really culminating in a record shipment month in March.

And we expect those volumes to continue to grow as the year goes on. Again, the key at Brandenburg is really around product development, and we've seen a tremendous amount of progress there. In fact, 25% of what we shipped out of Brandenburg in the first quarter were products that Nucor was unable to offer prior to Brandenburg.

like to touch on. One, the team has been working for six or eight months now and finally achieved our ABS certification, which will allow us to supply customers in the shipbuilding space, so a huge step forward. And then secondly, we shipped our first wide X70 trials for that growing API line pipe market that Steve had referenced in his comments. That's a market that's typically around a 2,000,000, two point five million ton market and really heavily supplied traditionally by imports. So we're seeing very high levels of quote activity, and our customers are excited for Brandenburg to give them a domestic supply chain option.

So overall, we're super proud of the team, what they've accomplished. We're excited about the feedback we're getting from our customers who are ready to grow with Brandenburg and with the Nucor playgroup.

Yes. It's a fantastic story. Great update. Thanks for that color. And just maybe one sort of follow-up on Brandenburg.

What is or how do you think about the split between higher margin, higher value add product versus more commoditized product from that and the mix going forward from here this year and potentially next?

Lawson, look, I'll just touch on that from a high level. As we think about the product capability set in Brandenburg, it's it covers about 96% of the overall plate consumption in The United States. So as Brad just mentioned, they're going to continue to work on the most advanced grades, offering, again, the highest quality plate products. But again, it is a balance just as you commented. So we're going to look at our overall mix between Brandenburg, our Hereford County plants and Tuscaloosa.

So between the three, there's a very comprehensive commercial plan and strategy that will do both, bring volume to the mill as well as moving them ramping up to the higher value added products and higher grades. So you're going see us kind of target both ends of that as they've done because some of these qualifications, as Brad just mentioned, like the ABS, they don't come in weeks. Those are months and months of proving in the process control behind that. And anecdotally, I would tell you ABS comes at a perfect time, right, as we've seen the President's executive order on ships, Section three zero one and what we believe is likely to pass in the coming weeks in the Ships for America's Act. So again, this positions us incredibly well offering products today that Nucor has never offered, but very quite frankly, in North America, almost no one else can produce.

Thank you. Your next question comes from Timna Tanners from Wolfe Research.

Hey, good morning. Thanks for the color. I have two questions. So the first one I wanted to ask about is if you can provide us more clarity on the second quarter guidance. When you talk about the steel mills segment improving quarter over quarter, seems like a pretty easy calculation on the flat rolled side to say prices are up say $200 quarter over quarter scrap is maybe flat to down.

It seems like it could be a huge order of magnitude. I'm just wondering if you could provide any more framework around year over year. Is it going to be similar or any more ways to think about the cadence first to second quarter? Thanks.

Tim, I think that's pretty good math you're doing there. We're going to refrain we're not going to give any quantitative guidance with detail on the earnings call. What we're going to do is wait till our mid quarter guidance on that, but your math is dialing in the right direction.

Okay. Fair enough. That'd try. And then the second question is really about, not taking away from the clear benefits from tariffs for the entire sector, of course, and for your downstream business. But just getting questions about tariff impact particular to Nucor.

So for example, the slabs brought into CSI traditionally, equipment for your new mills such as West Virginia, Trinidad, DRI. Can you talk about ways that you're mitigating any of those tariff impacts that might not be so positive? Thanks again.

Tim. Now look, I'll touch on that. Look, it's something obviously is changing every day, right? We're seeing these reports out this morning as I'm sure you are and what's the President is likely to do regarding automobiles in that sector. So we're monitoring incredibly closely what those potential impacts will be.

You specifically mentioned West Virginia. Of that equipment has not only been bought, it's already been delivered. And so the exposure there is dropping day to day. And so it's not de minimis, but again, it's not from an overall perspective a significant needle mover to Nucor this year or in the coming. But I say that at the same time, I'm telling you, look, of these tariffs and the final remedies are not executed yet.

So in the raw materials supply chain, Nucor maintains the most diversified raw material supply strategy in the industry period. But look, I'd be remiss if I didn't come up to a higher level as well to say the small impact potential of a higher raw material price vastly is is, you know, much smaller than the impact of the overall macroeconomic trends of the industry. A healthy, vibrant steel industry and having a critical national defense and the pro American policies that you're seeing adopted by the administration trumps all of that pun intended. And so again, we'll monitor. We'll try to provide you more realistic data as we learn it.

But again, we think the impact to West Virginia from an equipment standpoint is going be minimal on raw materials. Al, anything you'd add that I didn't touch on?

Yes, think you covered it well. And Tim, that's a good question. It's obviously been an active year for us. I think what's helpful to talk through is just how we're positioned in raw material, and there's a few ways we're positioned that are unique and create value. One is the footprint, not only of our recycling assets but of our mills that particularly our high quality metallic consuming mills, the plate and sheet mills are all located on water, which gives us access to global markets, seaborne markets.

And then once that material is here, we can move it around country really effectively on the river system. The second is the intelligence gathering capabilities we have through the David J. Joseph Company. We operate the largest scrap brokerage in North America. We're buying and selling ferrous, nonferrous, ferroalloys, raw materials around the globe every day.

And third are those global relationships. These are long standing relationships we have that give us access to the different levers we can pull to impact and mitigate the very risks that you're talking about. So that's really the unique positioning, and and Leon hit it. It's it's very fluid. We we don't spend a lot of time predicting.

We spend a lot of time preparing for the changes that we know will come, and we've got the levers we can pull. We've got the pieces in place to allow us to do that and create value.

Thanks. Thank you. Your next call will be Alex Hacking, CITI.

Yes. Good morning. Thanks for the question. So I just wanted to ask about the extension of Section two thirty two to downstream products. Have you tried to quantify how many tons that could impact and what the benefits could be for Nucor?

Yes, Alex. Look, is fluid, as Al just mentioned, and it's something that our team Ben Peck and his team in Washington spends a great deal of time. No, we have not quantified or at least if we have nothing that I would share publicly. But what I would tell you is the overall impact and how we're seeing these move through is consequential. It is impacting.

We're seeing again a drop below 20% imports for the first time in many years. So it's having that positive impact. The other piece of this that we did not see in Trump one point zero during his first term was in derivative products being included in these pieces of legislation. So again, we think that's a step in the right direction and we'll continue to work with the current administration to make sure that all of the products, whether it's raw materials or downstream, are being looked at and considered for, again, not just Nucor, but the health and the vibrancy of the steel industry and the macro.

Okay. And then just following up on the guidance for steel products, Steve, I think you said that prices would probably decline for the next couple of quarters just based on lags and so on. But I also think you implied that margins would be relatively stable because substrate costs would also kind of be coming down. Is that the message? I just wanted to double check that.

So we were successful in implementing price increases across all of our downstream businesses over the course of Q1. And some of those businesses, you will see a lag when we realize those price increases later in the year, more so on joist and deck, buildings, rebar fabrication. So there will be some margin compression, which is normal as we work through these cycles in Q2. The business that will see the benefit immediately is the tubular products, where those are very closely related to the price of hot band, and we are realizing well above the increases in hot band on our tubular sales. But we've been through this every time we go through this cycle.

It's very much what we would expect to happen.

Thank you. And your next call is from Bill Peterson from JPMorgan.

Yes. Hi, good morning team and thanks for taking the questions. I wanted to come back to the mills and the first quarter results, the second quarter guidance and what's driving the stable outlook. And I wanted to ask, did you benefit from five extra shipping days? You mentioned April.

So I'm wondering if there was more shipping days in the first quarter, less shipping in the second quarter. Also, if you can try to help us understand if there's any pull forward in demand in Q1 and how that, I guess, informs the stable outlook for the second quarter. And I guess within the mills, is there any parts of the formats, plate, bar or sheet that may outperform or ship, let's say, increased shipments versus weaker?

Yes, Bill, I'll start us off and then maybe Steve can add some color to I think the first question you had around volumes and the additional shipping days. But look, let's begin with the part of your question about pull through. We've gotten that a lot over the last six, eight weeks since these tariffs were announced. And what I would tell you, look, we did see some pull through. We did see some emergency coming right as those were announced.

But the important part of that and looking through that pull through is what happened on the back end of that in the last month or two. And what we've seen is no drop off at all in terms of order entry rates and inquiries. In fact, I would tell you it's just been as strong as we continue into the quarter. So we've seen no drop off whatsoever. And as we think about the backlogs that Steve and I both touched in our opening comments, I'll share one data point with you.

Again, while they're up about 30% Q over Q, about 25% year over year, one data point that we look at that I think is a good bellwether for kind of the macroeconomic trend is our structural backlog. If we look today at what our structural backlog is, it is sitting at the highest levels in our history, like ever. So the backlogs at Nucor Yamato and Nucor Berkeley beams are sitting at levels we've never seen before. And what I would tell you in that backlog, it's not distribution. It is orders by our fabricators.

And so that is locked in business on projects that have been led and awarded. And so that backlog is massive, hundreds and hundreds of thousands of tons. And so that bodes very well as we move throughout the rest of this year in terms of as you asked about the upside. And so are there upside potentials? Yes, there are absolutely upside potentials.

We've used the words cautiously optimistic, but we are optimistic in what we're seeing. We're optimistic in our backlogs, order entry rates, our pricing stability throughout the entire enterprise as well as the demand drivers like the segments that we serve in data centers, energy, warehousing, the advanced manufacturing, towers and structures and those two plants that will be coming up online in the coming weeks. So Nucor is well positioned to, again, meet these end markets today as well as tomorrow as these projects come online. And so as Brad mentioned, our excitement about Brandenburg and its realizing its full offering and again paying back our shareholders for the $1,700,000,000 is exciting. But look, we couldn't be more excited about Lexington, North Carolina's micro melt.

The Kingman, Arizona melt shop that we'll be starting up in the coming months are galvanizing lines at CSI, Crawfordsville, Nucor Steel, Berkeley and ultimately culminating with a West Virginia startup at the end of next year, which will offer the most state of the art, cleanest, advanced strength and automotive exposed steels that Nucor has ever entertained before. So yes, I couldn't be more optimistic about the year, but quite frankly, the next several years as Nucor's full potential is realized.

Yes. Thanks for that. And again, I don't know if Steve can comment on the five shipping days or not. But maybe the second question is the intersegment eliminations came in a bit lighter than we'd expected and the guidance implies a higher level in the second quarter. Is this primarily related to expectations of a steady downstream activity into the third quarter and back half of the year?

Is there anything related to higher priced DRI coming out of Trinidad? Are there other factors play?

Yes. Hey, Bill. The back to the calendar question, it is a proclivity of Nucor's financial calendar that crops up. And you'll see it every five, six years where we'll have a ninety five day quarter. Last year, had like ninety days or ninety one days.

I don't remember which it is. But, so there's a little bit of that and that has to do with how we, for roughly fifty years have run our fiscal calendar versus the Gregorian calendar that's out there. So you'll have to just kind of adjust that if you want to. But the other thing the other part of your question was about the corporate ELMs and that probably isn't surprising that that's rising given the pricing environment that we have across the board, the strength of our backlog, which is very, very broad based. Leon highlighted that.

It's not one or two areas. It's essentially across our whole portfolio. We see strength. And so you'll see either flat to increasing volumes in some spots, but as margin and profitability goes up, that elim number goes up as well.

Thank you. Your next question comes from Mike Harris from Goldman Sachs.

Yes, good morning and thanks. Just considering the adjusted EPS of $0.77 compared to the guided range of $0.05 0 to $0.06 Can you speak to what happened or didn't happen between March 20 and quarter end that resulted in what appears to be roughly, I don't know, 40,000,000 to $60,000,000 after tax windfall?

Yes. Hey, Mike. There were really kind of two parts to your question there. One is why do we have a beat and the other what's in the adjusted number. And so really the beat was driven by volume beats in our steel segment.

That's where the vast, vast majority of that came from. And it was bar and sheet primarily. Those are our largest volume businesses, so maybe that's not overly surprising to you. And with regards to the adjustments, those were non reoccurring adjustments that were related to either the closure of facilities or the repurposing of facilities. About one third of those were related to our steelmaking business and about two thirds were related to downstream product locations.

Okay. Thanks for that additional color. And then just one quick follow-up here. It looks as if you lost about maybe 120 basis points of gross margin sequentially. And I guess besides the 10 planned outages, what else contributed to the squeeze and maybe speak to any structural cost increases versus what may be transient?

Mike, there's really a couple of places where the margin squeezes we're seeing. One is, if you look at year over year numbers, if you look at that in our steel mill business, conversion costs were up about 2% to 3%. That was largely driven by energy costs being a little bit higher and some of our consumables were up just a little bit. Overall, most of the costs were sideways year over year and a few were down. So you're seeing some of that in primarily energy.

But then the second aspect is scrap cost quarter over quarter were up about 3%. So the combination of those and that lag effect that we have in our pricing of our steel means that you had some margin squeeze even though we were in a period when market prices were going up.

Nucor (NUE) Q1 2025 Earnings Call Transcript

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