Nucor expects first quarter profits to break 2008 record to exceed $ 900 million

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Nucor‘s (NYSE: NUE) latest quarterly figures confirmed a recovery in key end markets, and management was confident that the trend would continue. But what America’s largest steelmaker may not have anticipated is the scale of the recovery.

Demand is so strong that Nucor is not even halfway through its first quarter, but is already forecasting the potential net profit it could earn in the quarter ending April 3. He just announced that his first quarter net profit could exceed (hold your breath) $ 900 million. This is a remarkably high number for several reasons.

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“We currently expect our first quarter 2021 results to significantly exceed Nucor’s previous record for quarterly net income, set in 2008,” said CEO Leon Topalian.

Nucor’s first quarter has been quite volatile since 2008, when the company reported net income of $ 409.8 million.

That means two things: A projected net profit of $ 900 million or more for the first quarter of 2021 is not only expected to be the highest on record for the company, but also to break its previous quarterly record by a huge margin. Plus, just to let you know, Nucor made $ 20.3 million in the quarter of last year, so you might as well prepare for the headlines shouting about a jaw-dropping growth number of year on year when the company reports earnings in April.

That $ 900 million is just a predicted number for now, but it reflects Nucor’s confidence. The company is enjoying strong business conditions in most of its end-user markets, particularly non-residential construction and automobiles, and it had a good January in terms of operational performance.

Specifically, the continued strength in prices and volumes is expected to lead to increased sales and profits in Nucor’s core steel mill segment, which manufactures plate, bar and beam.

Likewise, Nucor expects significantly higher profits from its raw materials segment thanks to higher selling prices, such as for iron ore. Just a few days ago Swiss credit increased its iron ore price forecast for 2021-2022 by almost 50% due to tight supply.

Nucor’s outlook for the first quarter is extremely encouraging and should particularly excite income investors who have put their money into this. Dividend Aristocrat, which gives a good 3% currently.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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