NUE · Q2 2025 Earnings
CautiousNucor
Reported July 28, 2025
30-second summary
Nucor's steel mill segment generated $843M of pre-tax earnings, more than triple Q1, driven by sheet and plate price gains that pushed average selling price per ton up 8% QoQ. EBITDA reached $1.30B and EPS landed at $2.60. Management explicitly guided Q3 "nominally lower" than Q2 with steel mill margin compression, framing the give-back as lag effects from earlier low-priced orders rather than demand weakness.
Headline numbers
EPS
Q2 FY2025
$2.60
Revenue
Q2 FY2025
$8.46B
+4.7% YoY
Key financials
Q2 FY2025| Metric | Q2 FY2025 | YoY |
|---|---|---|
| Revenue | $8.46B | +4.7% |
| EPS | $2.60 | — |
Guidance
Prior quarter data unavailable — comparison not possible.
Other KPIs
Q2 FY2025| Segment | Q2 FY2025 |
|---|---|
| Total tons shipped to outside customers | 6.82 million tons |
| Steel mill shipments | 6.47 million tons |
| Steel mill shipments to internal customers | 22% of total |
| Average sales price per ton (vs Q1 2025) | +8% |
| Average scrap and scrap substitute cost per gross ton | $403 |
| Steel mill operating rates | 85% |
| EBITDA | $1.295 billion |
| Pre-operating and start-up costs | $136 million ($0.45 per share) |
Management tone
Nucor's Q2 commentary is more emphatic on structural demand and trade-policy support than a typical mid-cycle steel print. Five tone shifts stand out.
Steel mills moved from pricing pressure to substantial earnings recovery in a single quarter. Q1's framing of mill margins under pressure flipped: the segment generated $843M of pre-tax earnings, more than triple the prior quarter, driven by sheet and plate ASP gains. The bull case is that this is sustainable through the backlog; the Q3 "nominally lower" guide tempers that — management attributes the give-back to lag effects, not demand.
Demand commentary shifted from general optimism to enumerated, multi-year capex programs. From the release: "We're currently supplying steel to eight large semiconductor facilities now under construction... New course plate shipments to the bridge market hit a record in the second quarter and rose 35% for the first half of 2025... Nucor is seeing exceptional growth in power transmission, with the first half shipments to this market up 88% year over year." That level of segment-specific quantification signals conviction the demand mix is more durable than a single-cycle bounce.
Tariff policy is now framed as an active tailwind, not a watch item. Management welcomed the strengthened Section 232 program at 50% tariffs and said it is "optimistic that the administration's vigorous enforcement of our trade laws... will result in a sustained reduction of imports into our market." This is a clear move from passive monitoring to anchoring the margin thesis on enforcement.
Steel products is being reframed as structurally elevated, not cyclically recovering. "On an LTM basis, the steel product segment accounted for 45% of Nucor's total pre-tax segment earnings, with EBITDA margins of approximately 16%. Both of these metrics remain significantly higher than their respective pre-pandemic averages." Combined with backlogs extending into 2026, management is treating downstream as the new earnings core rather than a recovery story.
Brandenburg crossed from drag to contributor. "Production levels and shipments at our Brandenburg plate mill trended higher for a sixth consecutive quarter. Shipments in June reached another record, helping Brandenburg achieve positive EBITDA for the quarter." With 20%+ of Q2 plate volume in Brandenburg-only sizes and line-pipe approvals pending, the asset is moving from a quarterly question mark to a competitive moat.
Recurring themes management leaned on this quarter:
Risks management surfaced:
Q&A highlights
Bill Peterson · JP Morgan
On steel products margin compression: Is it driven by higher input costs? How should we think about pricing directionally through Q3, expecting expansion in Q4?
Margin compression is due to lag effects from orders taken in late Q4/early Q1 at lower pricing levels, not weak demand. Joist and deck markets remain robust with 6-9 month backlogs. Recently announced price increases. Downstream businesses have custom engineered products that separate pricing from raw material movements.
Lawson Winder · Bank of America Securities
On Lexington and Kingman ramp-ups: Can you detail pre-operating startup costs and period-by-period outlook as these assets move toward positive EBITDA contribution?
Pre-op costs declined Q/Q due to Brandenburg reaching break-even. Expected to be $140-150M per quarter in H2. Company is 3/4 through major capital investment plan. Brandenburg achieved EBITDA positive in Q2 with record production and shipments. Over 20% of Q2 plate shipments were Brandenburg-only sizes; approval from large line pipe manufacturers expected.
Katcha Janki · BMO Capital Markets
On Q3 margin compression in mills: If volumes and pricing are stable, what's driving the compression? Regarding tariffs, are you preparing for Brazil tariffs to go into effect August 1st?
Margin compression driven by: (1) tariff impacts on slabs and raw materials from Brazil, and (2) lag effect from lower pricing orders realized in Q3. Company has broad raw material flexibility and mitigation strategies. DRI pellet tariff issue 'largely taken care of' through alternative sourcing. Pig iron represents only 7-8% of melt (down from 14% five years ago); can pivot to DRI, low-copper shred. Company is modeling for Brazil tariffs to take effect; would represent upside if they don't occur.
Tristan Kresser · BMP Paribas
On Big Beautiful Bill: Can you detail potential impact, quantify timing? On working capital: Any inventory buildup ahead of tariffs? Outlook for working capital in H2?
BBB provides $47B for border wall (Nucor ready, did it before), $29B for shipbuilding (Brandenburg positioned), $150B defense spending. Top Fortune 50 companies announced $2T investment commitments into US over past 6 months; Nucor well-positioned across data centers, energy, manufacturing, shipbuilding, bridges, defense. Working capital build was $620M+ in Q2 alone due to price/volume trends; expecting dramatic improvement in H2 driven by working capital release and lower capital spending.
Phil Gibbs · KeyBank
On Big Beautiful Bill: Are there direct tax benefits in H2 2024 or 2026? On costs: CSI buys foreign slab; expecting higher costs in Q3. What's outlook on energy/electricity costs?
Tax benefits are 'relatively limited' in near term; bill is forward-facing and most Nucor projects already underway. Main benefit is R&D spending expensing rather than amortizing over 7 years. CSI slab tariffs already in effect; team mitigating through self-supply of finished hot roll and international sourcing at competitive costs. Energy costs up YoY but flat QoQ at ~$40/ton steelmaking; outlook relatively flat next couple quarters.
What to watch into next quarter
Whether Q3 mill margin compression stays "nominal" or widens. Management framed Q3 as modestly lower; any guide-down beyond that breaks the thesis that compression is purely lag-effect from old order book.
Brazil tariff resolution and CSI input costs. Nucor is modeling tariffs as in-effect; if they are deferred or negotiated down, that is upside. If implemented harder than expected, mitigation levers (pig iron substitution, DRI sourcing) get tested at scale.
Pre-op cost trajectory tracking the $140–150M/quarter H2 run-rate. Q2's $136M is the starting point; meaningful overshoot would push break-even on Lexington/Kingman further out.
Working capital release converting to free cash flow. Management telegraphed "dramatic" H2 FCF improvement against a $620M+ Q2 build; the release explicitly anchored shareholder return capacity to this.
Steel products backlog into 2026. Currently up ~20% YoY and extending into 2026 for some products — watch whether this holds or extends further as a read on durability of the structural reframing.
Section 232 enforcement and import volumes. Management is anchoring pricing power to the 50% tariff regime; H2 import data will validate or undermine the "sustained reduction" claim.
Sources
- Nucor Q2 2025 press release (Form 8-K Ex. 99.1), filed July 28, 2025: https://www.sec.gov/Archives/edgar/data/73309/000119312525166550/d82440dex991.htm
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