Shares of steel manufacturer Nucor Corp. surged to another record high April 21 after executives reported the company’s most profitable first quarter ever and said they continue to see a strong 2022 ahead.
Charlotte-based Nucor posted a first-quarter net profit of nearly $2.1 billion in the first three months of the year, more than double its prior-year number, on net sales that climbed 50% to $10.5 billion. The company was able to limit increases in its cost of goods sold to about 30%, lifting its operating margin to nearly 28% versus 18.5% in early 2021 even though it shipped 11% fewer tons of product than early last year and 1% less than in Q4.
“I’m incredibly proud of the Nucor team’s exceptional focus on delivering world-class performance,” President and CEO Leon Topalian said in a statement. “Our key forward-looking indicators for 2022 remain favorable and we expect another strong year in both earnings and cash generation.”
Topalian and his team said demand remains strong in the company’s end markets but noted that shipments slipped from late last year because sheet mills were less profitable to run and because some customers trimmed their inventories. On a conference call with analysts and investors, he and Executive Vice President Rex Query added that the Nucor team also "didn't chase tons" in the spot market for sheet steel and that they expect utilization to pick up substantially from Q1's 77% in the coming months.
Nucor’s leaders are forecasting still greater profitability in the second quarter, saying the company’s bottom line should come in ahead of the all-time record set in the fourth quarter thanks to strength in the commercial construction market and higher prices for the raw materials the company sells.
Shares of Nucor (Ticker: NUE) rose nearly 4% on the back of the earnings report April 21, closing at $175.52, their highest ever finish to a session. At one point during the day, they changed hands at nearly $188 and are now up more than 50% year to date.