Al Root

Many steel companies provide mid-quarter updates. The recent set of updates is, well, lousy.

Investors might have expected better given President Donald Trump's tariffs on imported steel and aluminum. Those, however, look to have taken effect too late in the quarter to save early 2025 results.

Thursday, Nucor -- America's largest steel producer -- said it expected to earn 50 to 60 cents a share in the first quarter. Wall Street was looking for earnings per share of $1.06.

The guidance is surprising. Nucor reported EPS of $1.22 in the fourth quarter of 2024 and $3.46 in the first quarter of 2024.

Shares were down 3.5% in after-hours trading at $125.02. Shares lost 1.2% in regular trading, while the S&P 500 slumped 0.2%, and the Dow Jones Industrial Average was flat. Through Thursday trading, Nucor stock was up about 11% year to date, boosted in part by the potential positive impact of tariffs.

Lower selling prices are part of the problem for Nucor. Benchmark steel prices, however, spiked north of $900 a ton recently after Trump implemented 25% import tariffs on steel and aluminum. The spike came in late February -- apparently not soon enough to affect the quarter. Steel makers have some contract business unaffected by spot prices. What's more, there is also a lag between steel orders and steel deliveries.

The impact of tariffs is down the road, but Nucor didn't provide longer-term guidance. It just stuck to what it normally does.

U.S. Steel also provided guidance on Thursday. It expects first-quarter earnings before interest, taxes, depreciation, and amortization, or Ebitda, of $125 million. That is actually better than Wall Street's $119 million estimate.

Still, shares were down 3.1% in after-hours trading at $39.80 apiece. Nucor might be weighing on sentiment, or investors just expected more.

Overall, the direction of Nucor and U.S. Steel earnings looks similar. U.S. Steel reported fourth-quarter 2024 Ebitda of about $190 million and first-quarter 2024 Ebitda of about $414 million.

And like Nucor stock, investors had bid up shares of U.S. Steel early in 2024. Through Thursday trading, the stock was up 21%.

Investors are optimistic about the sector. They just got a little ahead of themselves.

Write to Al Root at allen.root@dowjones.com

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March 20, 2025 17:59 ET (21:59 GMT)

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