Nucor Earnings Call: Investing Heavily for Future Upside

Nucor ((NUE)) has held its Q4 earnings call. Read on for the main highlights of the call.

Nucor Earnings Call Signals Confident Growth Amid Short-Term Pressures

Nucor’s latest earnings call painted a picture of a company leaning aggressively into growth while managing through near-term earnings pressure and cash flow strain. Management struck an upbeat tone on strategy and operations, emphasizing record safety performance, robust demand and backlogs, supportive trade dynamics, and disciplined capital allocation. At the same time, they acknowledged softer Q4 results in some segments, elevated start-up costs, and an intentionally negative free cash flow profile in 2025 due to heavy investment—all framed as groundwork for stronger performance from 2026 onward.

Record Safety Performance Underpins Operations

Nucor highlighted its best safety performance in company history, with the lowest injury and illness rate ever recorded and eight straight years of improvement. The final two months of 2025 were described as the safest on record, reinforcing management’s stated goal of becoming the world’s safest steel company. This focus on safety is more than cultural messaging: for investors, it signals operational discipline, lower risk of disruption, and a workforce able to support the company’s aggressive growth and project ramp-ups.

Solid 2025 Financials Despite Q4 Slowdown

For 2025, Nucor reported adjusted earnings of $7.71 per share and roughly $4.2 billion in EBITDA, finishing the year with $2.7 billion of cash on the balance sheet. Q4 came in softer on a sequential basis—adjusted earnings of $1.73 per share and EBITDA of $918 million—reflecting both seasonal factors and project-related disruptions. Management framed these results as solid given the investment cycle and macro backdrop, positioning 2025 as a transition year between the past earnings peak and the next leg of growth.

Heavy Capital Investment as Growth Engine

Nucor reinvested $3.4 billion in 2025, with several major projects completed or entering ramp-up. Key assets include the rebar micro-mill in Lexington, Kentucky; the new melt shop in Kingman, Arizona; a Towers & Structures facility in Alabama; and new galvanizing and prepaint lines in Crawfordsville, Indiana. Management expects the majority of these projects to be fully ramped and generating positive EBITDA in 2026. For investors, this spend represents a deliberate shift toward higher-value products and increased capacity in markets where Nucor sees durable demand.

Backlog Strength Signals Demand Momentum

Demand indicators entering 2026 are notably strong. Steel mill backlogs are up nearly 40% year over year, with steel products backlogs higher by about 15%. Structural backlogs are more than 15% above the prior record, pointing to sustained strength in nonresidential construction, infrastructure, and energy-related projects. Management expects Nucor’s steel mill shipments to rise about 5% in 2026, suggesting volume growth even before factoring in price or mix benefits from new capabilities.

Trade Policy Tailwinds and Shrinking Imports

A sharp decline in foreign finished-steel imports is emerging as a key tailwind. Import share fell from roughly 25% a year ago to around 16% in October and an estimated 14% in November 2025. For Nucor, this tightening import environment supports domestic pricing power and helps absorb new capacity. The company highlighted reduced sheet imports as creating roughly 4 million tons of potential domestic opportunity, reinforcing the case for its recent and ongoing investment in flat-rolled and downstream products.

Plate Market a Standout Area of Strength

Plate-related markets are particularly robust. Nucor reported plate backlogs up about 40% year over year and estimated that domestic plate consumption rose around 15% in 2025. At the same time, cut-to-length plate imports declined roughly 20%, tightening supply and supporting healthy market fundamentals. This combination of strong demand and reduced import competition positions Nucor’s plate business as a key earnings contributor as newly completed plate-related assets ramp.

Capital Allocation: Lower CapEx and Shareholder Returns

Despite its large growth pipeline, Nucor emphasized capital discipline. CapEx is expected to fall to about $2.5 billion in 2026 from $3.4 billion in 2025, with roughly two-thirds of the budget still aimed at growth projects. Maintenance capital is pegged near $800 million annually. On the return side, Nucor sent $1.2 billion back to shareholders in 2025—about 70% of net earnings—and raised its quarterly dividend to $0.56 per share, marking 53 consecutive years of dividend increases. The message to investors is that Nucor intends to balance aggressive reinvestment with consistent, shareholder-friendly capital returns.

Expected $500 Million EBITDA Uplift From New Projects

Management estimates that recently completed projects, including the Brandenburg facility and other key investments, should deliver approximately $500 million of incremental EBITDA as they ramp through 2026. Many of these assets are either already coming online or are scheduled to reach EBITDA-positive status during the year. This expected uplift is central to Nucor’s thesis that current start-up and pre-operating costs will translate into meaningful earnings expansion once the projects reach steady-state performance.

West Virginia Mill to Expand High-Value Capabilities

A major strategic focus is the new mill in West Virginia, designed to add differentiated capabilities across high-value markets. Roughly one-third of its production is targeted to automotive customers, including exposed automotive grades, and the project will bring around 1 million tons of additional galvanizing capacity. This positions Nucor to deepen its presence in automotive and other premium segments, diversifying away from more commodity-like steel and leveraging the trend toward higher-quality, domestically sourced materials.

Q4 Earnings Pressure in the Steel Mills Segment

The steel mills segment posted pretax earnings of $516 million in Q4, down about 35% from the prior quarter. Shipment volumes declined roughly 8% sequentially, reflecting seasonality, fewer shipping days, and both planned and unplanned outages. Pricing weakness in sheet and plate offset gains in bar and structural products. Management presented the quarter’s softness as largely temporary, linked to timing and operational factors rather than a fundamental weakening of the demand backdrop highlighted by the strong backlogs.

Q4 Softness in Steel Products and Raw Materials

Steel products and raw materials also faced headwinds in Q4. Steel products pretax earnings dropped to $230 million from $319 million in Q3, with rebar fabrication alone accounting for roughly half of the quarter-over-quarter volume decline. Raw materials pretax earnings fell to about $24 million from $43 million, driven mainly by two scheduled outages at direct reduced iron (DRI) facilities. While these results pressured near-term profitability, the issues were framed as operational and timing-related rather than structural weaknesses.

Negative Free Cash Flow and Elevated Start-Up Costs

Nucor’s free cash flow was negative in 2025, a point management described as intentional and tied to its heavy growth investment cycle. Pre-operating and start-up costs reached $496 million in 2025 and are expected to remain elevated into 2026 as more projects come online and ramp. For investors, that means some drag on reported earnings and cash flow in the near term, but management argues these expenses will convert into earnings power as the new facilities achieve scale.

One-Time Charges and Asset Impairments

The company’s adjusted results removed several one-off items. Q4 adjustments excluded $27 million of noncash asset impairments, equivalent to about $0.09 per share, while full-year adjustments excluded around $23 million—or approximately $0.10 per share—linked to prior-period closures and asset repurposing. By isolating these charges, Nucor aimed to give investors a clearer view of underlying operating performance in a year marked by portfolio and footprint optimization.

Interest-Rate Sensitive Markets Still Lagging

Management acknowledged that some end markets remain sluggish due to higher interest rates. Automotive and residential construction, in particular, have shown only limited improvement so far. While other areas such as infrastructure, energy, and nonresidential construction are providing strong support, the lack of a full rebound in rate-sensitive sectors could cap upside in certain product lines until monetary conditions ease or broader consumer demand improves.

Execution and Ramp-Up Risks on Large Projects

Nucor was candid about the execution risk tied to its large and complex projects, especially greenfield mills such as West Virginia. Management cautioned that these facilities may not reach full run-rate EBITDA immediately, even once they are technically online. The West Virginia mill is expected to be completed and ramping in 2026, with some spending potentially carrying into 2027. Investors are being asked to be patient as these assets move through commissioning, ramp-up, and optimization phases before delivering their full earnings contribution.

Guidance: Modest Demand Growth, Higher Shipments and Cash Flow

Looking ahead to 2026, Nucor guided to slightly higher domestic steel demand versus 2025, with its own steel mill shipments expected to rise about 5%. Management anticipates higher consolidated earnings and increased volumes in each segment in the first quarter of 2026, supported by very strong backlogs and a lower import share. Recently completed projects are expected to be EBITDA-positive within the year, collectively contributing roughly $500 million of incremental EBITDA, even as pre-operating and start-up costs remain elevated. CapEx is projected at about $2.5 billion in 2026—down from $3.4 billion in 2025—with around two-thirds dedicated to growth and maintenance capital tracking near $800 million annually. Specific project milestones include Lexington and Kingman turning EBITDA-positive by the end of Q1 and fully ramped by year-end, the West Virginia mill on track for year-end completion, and the Berkeley galvanizing line slated for mid-2026 commissioning. Management expects meaningfully higher free cash flow in 2026 following 2025’s negative free cash flow, supported by a $2.7 billion cash position at year-end and a track record of returning about 70% of net earnings to shareholders in the prior year.

In sum, Nucor’s earnings call balanced near-term caution with clear long-term optimism. While Q4 profits were pressured and free cash flow turned negative amid an investment surge, the company enters 2026 with record safety metrics, strong backlogs, supportive trade conditions, sizable new capacity, and a disciplined capital framework. For investors, the story is one of accepting short-term volatility and elevated start-up costs in exchange for a potentially stronger earnings and cash flow profile as the 2025–2026 project wave matures.