Nucor CEO Puts Data Centers At Just 1.5% Of Backlog, Yet Says Company Can Supply 95% Of Their Steel
Leon Topalian called demand the strongest he has seen in 31 years at the steelmaker, but data centers are a small slice of orders.
Data centers, the end market drawing the most attention, make up only about 1.5% of Nucor's backlog, CEO Leon Topalian told analysts on the steelmaker's third-quarter earnings call Tuesday. Nucor, which makes steel and steel products in electric arc furnaces that melt mainly scrap, says it can supply roughly 95% of the steel a data center needs.
A small slice, expected to grow
Topalian, who is chair, president and CEO, called data centers a strong market and said Nucor expects that business to grow into 2027. He said the company's entry into the field goes back two or three years.
The 95% figure covers steel inside and outside a data center, he said, and rests on the Southwest Data Products acquisition, nuclear warehouse systems and the plate and structural groups.
Randy Spicer, executive vice president for bar, engineered bar and rebar fabrication, called the build-out "the AI Super Bowl" and said the larger sections hyperscalers need are showing up in Nucor's order book. "We're at record levels," he said of merchant bar orders.
Strongest demand in 31 years
Topalian said that in his 31 years at Nucor, "I am seeing early the strongest demand environment across the breadth of Nucor's products." He listed chips, gas power plants, LNG export terminals, nuclear utilities, pharma, shipbuilding and defense spending.
The third quarter was Nucor's strongest in more than three years, he said, with about $2.3 billion of EBITDA (earnings before interest, taxes, depreciation and amortization) and earnings of $5.80 per share. Steel mill shipments topped 7.2 million tons, a record for the third straight quarter. Chief Financial Officer Jack Sullivan said free cash flow was $1.6 billion in the quarter, nearly $2.7 billion for the year to date.
Company executives expect fourth-quarter earnings in line with or modestly above the third quarter. Steel mill shipment growth for 2026 should finish closer to the higher end of a 5% to 10% range, said Steve Laxton, president and chief operating officer.
Border wall and infrastructure tons
Asked by a JPMorgan analyst about the border wall, John Hollatz, executive vice president for tubular products, said about 1,400 miles of new wall remain to be built, at around 1,500 tons of steel per mile. Shipments to the border will continue through 2027 and well into 2028, he said.
Laxton pointed to more than $135 billion of infrastructure funding that had yet to be spent as of August, and to utilities planning to spend nearly $1.4 trillion over five years.
The call dropped before the last two analyst questions could be taken. Topalian said investor relations would follow up with those analysts.
Sullivan said Nucor will detail its 2027 capital allocation plans on its year-end call in January, with capital spending expected to fall further next year.
Sources
- Nucor (NUE) Reports Q3 Earnings: What Key Metrics Have to Say — Yahoo Finance
- Nucor (NUE) Q3 Earnings and Revenues Top Estimates — Yahoo Finance
- EX-99.1 — sec.gov
- Nucor Shakes Off Q3 Miss As Steel Prices Hit 4-Year High | Investor's Business Daily — investors.com
- Nucor Non-GAAP EPS of $4.84 misses by $0.99, revenue of $11.25B beats by $460M (NYSE:NUE) | Seeking Alpha — seekingalpha.com
