Nucor posted the highest second-quarter profit in its history as the steelmaker ramped up output to meet demand from President Trump’s 25 percent tariffs on imports from overseas competitors.
The Charlotte, N.C.-based company has benefited as Trump’s duties reduced so-called dumping of illegally subsidized metals in the U.S. from foreign producers, said Chief Executive Officer John Ferriola. China, in particular, has long been criticized for undercutting steel prices, which harms American manufacturers.
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“The tariffs send a clear message that the U.S. is done asking nicely for compliance with the rules of trade and is serious about demanding
changes in the trade practices of other countries,” Ferriola said on an earnings call. “We believe these efforts will lead to a freer, fairer trade that will benefit manufacturers, our customers and American workers by creating a stronger domestic economy.”
Imposed on national security grounds, the duties were intended to bolster demand for U.S. goods, and Nucor’s increasing use of its production capacity shows the strategy may be working. Utilization rose 6 percentage points to 95 percent, the company said in a statement.
Earnings of $2.13 a share surpassed the $2.10 average estimate from Wall Street analysts, and net income more than doubled to $683 million.
“The primary driver of the improved performance was our steel mills segment, which experienced higher average selling prices and increased profitability across all steel mill product groups, with the strongest profitability increase at our sheet mills,” the company said in a statement.
While Ferriola praised the Trump administration’s efforts to cut the U.S. trade deficit, he said the company’s performance can’t be entirely attributed to the impact of tariffs. Revenue was also buoyed by a GOP tax cut, which reduced the top corporate rate to 21 percent from 35 percent, and looser regulations combined with a growing U.S. economy.
Nucor said in May that it would invest $240 million in its sheet mill in Arkansas to expand its product line and increase capacity by 500,000 tons a year.
The company’s stock fell 1.4 percent to $64.67 in New York trading, as a decline in broader markets combined with a surge in raw-materials costs.
