Nucor (NUE) Q3 2026 earnings review
Nucor's profit more than doubles, while steel imports climb
Nucor earned more from higher steel prices and expanding order backlogs while its capital spending dropped. Revenue rose 32% from a year ago, and profit per share more than doubled to $5.80, beating last quarter even without the second quarter's one-time gains. Chief executive Leon Topalian noted that strong demand lifted nine-month free cash flow to $2.7 billion, and the steelmaker forecasts fourth-quarter profit to at least match the third quarter.
| Revenue | $11.25B +32% from a year ago |
|---|---|
| Diluted profit per share | $5.80 +121% from a year ago (+20% vs Q2 excluding one-offs) |
| Free cash flow | $1.61B nearly double Q2's $829M |
| Q4 earnings outlook | Held high in-line with or modestly above Q3 |
⚖️ Verdict: 🟢 Bullish
The story got better because Nucor's downstream construction products recovered their profit margins and the fourth-quarter outlook defies the normal winter slowdown. Steel mill order backlogs also grew to 5.9 million tons, up 69% from a year ago by our math, showing that buyers are still booking orders at high prices. One caution: foreign steel took 17% of the US market in the third quarter, up from 14% late last year despite federal tariffs.
The question now is whether rising steel prices and backlogs reflect multi-year infrastructure growth or a late-stage price peak vulnerable to imports. If domestic construction keeps absorbing extra supply, profit stays near current records; if rising imports and the new West Virginia sheet mill oversupply the market, prices will fall. Fourth-quarter import share and sheet prices will tell.
🐂 Bull Case
Higher Steel Prices Replaced Last Quarter's One-Off Gains
Last quarter's profit at Nucor, North America's largest steelmaker and scrap recycler, included $191 million of one-time pre-tax gains from a $130 million raw-material refund and a $61 million valuation write-up on fusion energy company Helion. In the third quarter, higher steel prices more than replaced both items.
- Steel mills pre-tax profit: $1,788 million, up 15% from last quarter and up 25% excluding the refund by our math
- Steel mills average selling price: $1,233 per ton, up 8% from last quarter while scrap costs held at $421 per ton
- Cost of making products: 79.3% of sales, down 6.7 percentage points from a year ago by our math
This matters because the gap between steel prices and scrap costs widened by 26% from a year ago by our math, lifting steel mill profit per ton to $247. Marketing and administrative overhead rose 0.4 percentage points of sales to 3.9% because the Helion gain did not repeat.
What to watch: fourth-quarter steel mill profit per ton. Holding near $247 per ton when winter volumes dip would confirm that contract prices still cover rising production costs.
Downstream Steel Products Profit Rebounded as Backlogs Grew
Nucor's steel products segment makes finished construction goods such as steel joists, roof decking, rebar and utility towers. Rising mill steel prices had squeezed this division's margins in the first half because its customer contracts take two to three quarters to reprice.
In the third quarter, older orders cleared and average selling prices rose 7% from last quarter to $2,576 per ton. Pre-tax profit jumped 32% from the second quarter to $465 million, and profit per ton recovered from $275 to $341. Joist and deck shipments climbed 20% from last quarter, while total steel mill order backlogs rose 5% to 5.9 million tons, up 69% from a year ago by our math.
What to watch: steel products pre-tax profit in the fourth quarter, which Nucor expects to stay stable. Holding near $465 million through the seasonal construction slowdown would show the margin squeeze has ended.
Falling Capital Spending Tripled Free Cash Flow
Chief executive Leon Topalian said that "Nucor has generated approximately $2.7 billion of free cash flow and returned nearly $1.4 billion to shareholders through the first nine months of the year". Free cash flow — operating cash flow minus capital spending — reached $1.61 billion in the third quarter alone, nearly double the second quarter's $829 million and triple the $532 million generated a year ago.
The cash surge happened because operating profit doubled while nine-month capital spending fell 29% from a year ago to $1.86 billion as major factory builds neared completion. That allowed the steelmaker to return 42% of nine-month net earnings to stockholders by our math, above its 40% annual floor, while still funding a new $165 million expansion at its utility tower plants in Indiana and Alabama.
What to watch: fourth-quarter capital spending against the $639 million implied by our math from the $2.5 billion full-year budget. Staying near that level keeps annual free cash flow above $3 billion.
🐻 Bear Case
Foreign Steel Imports Keep Taking Share Despite Tariffs
Nucor's presentation states that federal trade policy is leveling the playing field and notes that year-to-date finished steel imports are down 13% from 2025. Yet the same slide shows that foreign steel has steadily recaptured domestic market share every quarter this year.
- Import share of US carbon and alloy steel: 17.2% in Q3, up from 14.3% in Q4 2025
- Imports from South Korea: up 57% year-to-date despite Section 232 steel tariffs
- US steel mill external price: $1,233 per ton, up 19% from a year ago
This matters because high US steel prices attract foreign supply even with tariffs in place, as the company noted a "Massive surge y-o-y in imports from South Korea (+57% through Q3) despite Section 232 measures". Domestic demand absorbed the extra tons in the summer, but a fourth-quarter seasonal slowdown leaves prices exposed if import share keeps climbing.
What to watch: finished steel import market share in the fourth quarter. A move back toward 20% would pressure US sheet and plate prices in early 2027.
West Virginia Mill Ramp Keeps Start-Up Costs High
Topalian highlighted the "first heat at our West Virginia sheet mill in September", marking a construction milestone for the 3-million-ton-per-year plant. However, pre-operating and start-up costs — expenses to test and staff new plants before commercial production — rose to $124 million ($0.42 per share) in the third quarter, up from $120 million in the second quarter and $103 million a year ago.
Nucor plans an intentional ramp for West Virginia, "building to 50% utilization run rate by YE 2027" and expanding further in 2028. Because third-quarter sheet shipments slipped 1% from the second quarter to 3.26 million tons, the new mill will add supply slowly while carrying start-up expenses through all of 2027.
What to watch: quarterly pre-operating and start-up costs in the fourth quarter and early 2027. A rise above $130 million per quarter would eat into the earnings from the new sheet tons.
Buybacks Accelerated at High Prices While Disclosures Lag
Nucor spent $501 million to buy back 2.03 million shares in the third quarter, while leaving several standing operational questions unanswered in its release and slides.
- Buyback timing: paid an average of $247.04 per share in Q3, 92% above the $128.66 average price paid in 2025 by our math, after buying only $100 million in Q3 2025
- Towers and structures profit: Nucor committed another $165 million to expand its Indiana and Alabama plants and said its "Backlog has more than doubled YTD, and extends into Q1 2028", but still does not disclose the unit's revenue or profit
- Electricity costs: no figures provided on power cost inflation from data-center demand across its electric-arc furnaces
What to watch: segment footnotes in the upcoming annual filing for separate revenue and profit disclosures on the utility towers business.
👓 Other Themes
Carbon Capture and Berkeley Galvanizing Line Started Up
Nucor began operating a carbon capture system with ExxonMobil at its Louisiana direct reduced iron plant, capturing up to 800,000 tons of carbon dioxide a year. Topalian also noted "the recent start-up of our second galvanizing line at Nucor Steel Berkeley" in October, adding corrosion-resistant sheet capacity for Southeast automakers after flat-rolled automotive shipments grew 4% in the first nine months.
💲 Other KPIs
Pre-tax profit in raw materials — scrap processing and direct reduced iron (DRI), an iron ore substitute for scrap — fell 28% from last quarter, as Nucor had indicated, though it stayed 144% above a year ago. DRI production dropped 13% from the second quarter to 960,000 tons, and lower selling prices further reduced segment margins.
Net debt — total debt of $7.09 billion minus $3.64 billion in cash and short-term investments — fell 22% from $4.41 billion last quarter by our math. Strong free cash flow lifted cash by $948 million in three months, cutting net debt to 0.5 times trailing 12-month EBITDA, down from 0.8 times in the second quarter.
Accounts receivable (money customers owe for shipped steel) rose to $4.30 billion, up 38% from year-end 2025 by our math, while inventories grew 10% to $6.02 billion. Higher steel prices and larger shipment volumes tied up $1.76 billion of cash in working capital across the first nine months.
🔮 Guidance
New. Nucor expects fourth-quarter profit to be "generally in-line with or modestly higher than the third quarter". That marks an unusual seasonal pattern because fourth-quarter profit normally drops when winter slows construction. By our math, matching the third quarter's $5.80 per share would mean profit more than triples from last year's fourth quarter ($1.64 reported, $1.73 excluding one-offs), aided by lower intersegment profit eliminations.
New. The steelmaker forecasts flat pre-tax profit in its mills because higher realized selling prices will offset "seasonally lower volumes and higher costs". Through three quarters, mill shipments are up 10% from a year ago at 21.38 million tons; by our math, the prior 5% to 10% full-year shipment growth plan implies fourth-quarter shipments of 5.16 million to 6.42 million tons.
New. Management plans for flat pre-tax earnings in downstream steel products as higher realized contract prices balance out seasonally lower fourth-quarter shipments. The presentation notes that "Backlogs extend into mid-2027 for many products".
New. The company expects a slight profit dip in raw materials due to "lower realized DRI pricing".
Unchanged. The US group maintained its commitment to return at least 40% of annual net profit via dividends and buybacks. Through nine months, it has returned $1.36 billion, or 42% of net earnings attributable to stockholders by our math.
❓ Key Questions
What are the revenue and profit in utility towers?
Nucor committed another $165 million to expand its Indiana and Alabama utility tower plants and noted that the backlog extends into 2028, but it still groups the business inside steel products without separate financial figures.
How much of West Virginia's 2027 output is net new?
The West Virginia sheet mill will ramp toward 50% capacity utilization by late 2027. Investors need to know how many tons will add to total company volume versus replacing tons currently made at older Nucor sheet mills.
Why is South Korean steel bypassing Section 232 tariffs?
Finished steel imports from South Korea jumped 57% in the first nine months, helping push total import market share up from 14.3% to 17.2%. Management has not explained whether quota exemptions or product exclusions are driving that inflow.
How fast are electricity costs rising at the mills?
Nucor highlights data-center construction as a major steel buyer, yet data centers also compete for grid power. Management has not disclosed how utility rate increases are affecting its electric-arc furnace conversion costs.