Nucor Corp (NUE) — Q1 2026 Earnings Call Transcript

Thank you, and good morning, everyone. Welcome to Nucor's First Quarter Earnings Review and Business Update. Leading our call today is Leon Topalian, Chair and CEO, along with Steve Laxton, President and COO; and Jack Sullivan, CFO. Other members of Nucor's executive team are also here with us today and may participate during the Q&A portion of the call. Yesterday, we posted our first quarter earnings release and investor presentation to Nucor's IR website. We encourage you to access these materials as we will cover portions of them during the call. Today's discussion will include the use of non-GAAP financial measures and forward-looking information within the meaning of securities laws. Actual results may be different than forward-looking statements and involve risks outlined in our safe harbor statement and disclosed in Nucor's SEC filings. The appendix of today's presentation includes supplemental information and disclosures, along with a reconciliation of non-GAAP financial measures. So with that, let's turn the call over to Leon.

Thanks, Chris. And as always, I want to begin by recognizing our 33,000 teammates across the company for their continued commitment to working safely. Safety is and will always remain our most important value. And at Nucor, that means more than the physical safety of our team. It encompasses the mental health of all of our teammates as well and with May being Mental Health Awareness Month, it's a great time to reinforce that commitment. And as we move through 2026, we are firmly focused on making this the safest year in Nucor's history. Before turning to our financial performance, I'd like to briefly highlight a few leadership updates. Effective March 1, Jack Sullivan was promoted to Chief Financial Officer, Treasurer and Executive Vice President. Since joining Nucor in 2022, Jack has demonstrated strong leadership, deep financial acumen and a clear understanding of Nucor's culture and how to create long-term value for our shareholders. Congratulations, Jack. We also announced that Dan Needham, our Executive Vice President of Commercial, will retire in June after 26 years with Nucor. I want to thank Dan for all the sacrifice and leadership during this time and wish him and his family the very best in retirement. Turning to Nucor's first quarter financial results. We generated EBITDA of approximately $1.5 billion and earned $3.23 per share. This is an excellent start to the year and a significant increase compared to the fourth quarter, driven by strong performance across all three of our operating segments. Consistent with our capital allocation framework, we returned $254 million to Nucor's shareholders through dividends and share buybacks during the quarter, while also reinvesting $661 million into the business. Roughly 40% of CapEx in the quarter went towards our new sheet mill in West Virginia. Operationally, our team has performed incredibly well during the quarter. One of the clearest indications is the record shipments our steel mills achieved for the quarter. At 7 million tons, this was the highest quarterly shipment volume in Nucor's history, reflecting strong execution across our 26 steel mills and growing contributions from recently completed projects. Equally encouraging is the momentum evident in our backlogs. At the end of the first quarter, our steel mills backlog was up to 4.7 million tons, a 20% increase from year-end and the highest level we've seen since the second quarter of 2021. In Steel Products, our backlog grew 9% from year-end with increases across all major product groups. I want to thank our operating and commercial teams for a strong start to 2026 and for putting Nucor in a position to deliver even better second quarter results for our customers and our shareholders. Turning to trade policy. The combination of Section 232, steel tariffs and trade remedy orders have been effective at reducing imports with that trend accelerating in the second half of '25 and continuing in the first quarter of 2026. Import share of the U.S. finished steel market declined from over 22% in the first quarter of 2025 to approximately 15% this quarter. More recently, we were pleased to see the administration reaffirm the 50% 232 tariff on steel and implement important changes to how derivative steel products are treated specifically applying tariffs to the full value of those products. This action simplifies administration and enforcement while closing a key loophole that has allowed for undervaluation and circumvention. Taken together with existing trade remedies, these measures are working to ensure a more level playing field for domestic producers. We appreciate the administration's recognition of the importance of a healthy and competitive American steel industry. That said, we remain vigilant and there is still work to be done. As USMCA discussions continue, there is an opportunity to address ongoing challenges including steel subsidies provided by the Canadian government and the use of North American channels as back doors to our domestic markets, putting U.S. manufacturers at a competitive disadvantage. We also continue to advocate for policies that prioritize the use of American-made steel in critical sectors such as energy, infrastructure, defense and shipbuilding. With that, I'll turn it over to Steve for an update on the growth initiatives and market outlook. Steve?

Thank you, Leon, and thank you all for joining us this morning. Our team continues to make great progress on our new sheet mill project in West Virginia, and we'll see key milestones achieved in 2026. We're entering the final phases of construction and will be sequencing commissioning of operations throughout the year, beginning with the pickle line in the second quarter. By the end of the year, we expect commissioning, inspection and testing of all equipment across the mill to be complete. Following commissioning, our priority will be to operate safely and reliably as commercial shipments begin ramping up in early 2027. We will be increasing production and advancing product development throughout 2027 and 2028, with capacity utilization and product offerings building steadily over time. Once fully ramped, Nucor West Virginia will supply some of the cleanest and most advanced sheet steel in North America with expanded capabilities to better service automotive and consumer durable markets. This positions Nucor to grow market share in the Midwest and Northeast, two large sheet-consuming regions where Nucor is relatively underweighted today. In addition to West Virginia, we have several major capital projects under construction or ramping up, and we're making meaningful progress across all of them. Starting with projects under construction, in our Towers and Structures business, we're building two new utility towers facilities, one in Indiana and one in Utah. In Indiana, we expect to be fully operational in the third quarter of this year. And in Utah, we expect to reach full production by mid-2027. We are also advancing the construction of the second galvanizing line at our Berkeley County sheet steel mill in South Carolina. Once complete, this line will expand our ability to service automotive customers in the Southeast. Equipment commissioning is planned for the middle of the year, and we expect production to begin in the fall. In addition to projects under construction and commissioning, we have recently completed several growth projects that are advancing their strategic and commercial plans as expected. In the bar group, our new micro mill in Lexington, North Carolina and our new melt shop in Kingman, Arizona, were both EBITDA positive in March. In the sheet group, our new galvanizing line at Crawfordsville, Indiana was also EBITDA positive in March, and we expect to commission the paint line later this year. Finally, our Alabama Towers and Structures facility is expanding its customer base, improving production and on track to reach EBITDA-positive run rates by the end of the summer. Before I turn the call over to Jack, let me share how we're thinking about the current market environment and Nucor's place in these markets. Already the established industry leader, producing roughly one out of every four tons of steel in the United States and having an unparalleled range of product offerings in our downstream businesses, Nucor continues to find ways to grow. After achieving approximately 6% growth of shipments in 2025, we expect shipments to grow by more than 5% in 2026. A confluence of factors are enabling this. First, consistent with our comments on Nucor's fourth quarter earnings call in January, overall demand remains relatively stable. There are pockets of strength, such as data centers, energy, border fence and infrastructure, and there are some markets that have remained softer for now, including consumer cyclicals, traditional office, heavy equipment and agriculture. Taken as a whole, we expect domestic steel consumption to be stable with overall demand remaining flat to up 2% for 2026. Second, as Leon highlighted, enforcement of trade laws is stabilizing what might have happened in the past where patterns of flooding dumped imports shock the supply picture. And third, execution by our team with the investments we've made. Nucor is well positioned with the portfolio we've developed to service market segments exhibiting particular strength right now. A few examples include: we can supply 95% of the steel needed to build a data center. We're the leading manufacturer of HSF structural tubing that are the primary building materials for large sections of the border fence. Our industry-leading pre-engineered metal buildings and insulated metal panels offering helped to accelerate our customers' speed to market, which is increasingly valued in today's landscape. And as a leading domestic producer of beams and bar, we are an essential material supplier, an enabler for the construction of pipelines, LNG terminals, bridges, manufacturing facilities, and power generation and transmission infrastructure. Nucor's national reach, coupled with our strength in raw materials, steelmaking and downstream products provides supply chain integration, improved reliability and operating efficiencies that no other North American producer can match. We have the right capabilities and team for this moment, and we're always looking ahead to ensure Nucor remains well positioned as markets evolve. With that, I'll turn it over to Jack for a closer look at our first quarter financial results and our outlook for the second quarter. Jack?

Thanks, Steve, and good morning, everyone. In the first quarter, Nucor generated net earnings of $743 million or $3.23 per share, exceeding the midpoint of our guidance range by nearly $0.50. The beat was largely due to higher volumes and higher margin product mix. After some weather-related shipping delays early in the quarter, the team delivered a very strong March with our sheet, plate and rebar groups all setting quarterly shipment records while structural steel shipments reached levels not seen since 2021. Turning to the segment level results for the first quarter, the steel mills segment generated $1.1 billion of pretax net earnings, more than double the prior quarter. Volumes and average selling prices increased across all four product groups with sheet and structural being the largest drivers. Metal spreads also expanded across all formats. In Steel Products, we generated pretax earnings of $285 million, up 24% from the fourth quarter. Volumes increased 13% on stable pricing with our Tubular group setting a new quarterly shipment record. Strong demand related to the border fence was a significant contributor, and we expect that to continue for the next several years. We did see some margin compression due to higher steel input costs flowing through, but we expect this to ease as the year progresses and realized pricing catches up. And in our raw materials segment, we generated pretax earnings of approximately $45 million compared to $24 million in the prior quarter, reflecting higher DRI production following two planned outages in the fall. Pre-operating and start-up costs totaled $108 million for the quarter. As a reminder, we expect these costs to trend higher as we work our way further into 2026 and toward the completion of our West Virginia sheet mill. Moving to the balance sheet. Our strong investment-grade credit profile is the foundation of our capital allocation framework. It allows us to execute our strategy of disciplined investment to grow our business while still providing meaningful cash returns to shareholders. We ended the quarter with approximately $2.5 billion in cash and liquidity of $3.2 billion. Total debt as a percentage of capital sits at 24% and our credit ratings remain the strongest of any U.S.-based steel producer. Capital expenditures totaled $661 million for the quarter, and we remain on track with our $2.5 billion CapEx estimate for the full year. While this level of investment remains elevated as we finish several remaining growth projects, it is moderating compared to recent years. And as our CapEx is trending down, our cash from operations is moving up. That combination produced a meaningful increase in free cash flow for the quarter, and we expect this trend to continue. We also returned over $250 million to shareholders in the form of dividends and share repurchases or roughly 34% of quarterly net earnings. Consistent with our long-term track record, we remain committed to returning at least 40% of net earnings to shareholders on an annual basis. Looking ahead, Nucor's financial strength, highly variable cost structure and business diversification, position the company to invest in growth, reward our shareholders and navigate through economic cycles. Turning to our second quarter outlook, we expect higher consolidated earnings with improvement across all three operating segments. In steel mills, we expect stable volumes and increasing metal margins. The margin improvement reflects higher realized pricing, partially offset by rising raw material costs. Within the segment, we expect our sheet and plate businesses to be the largest contributors in the sequential increase. In Steel Products, we expect higher volumes and stable pricing. Some of our longer lead time products like fabricated rebar and joist and deck, margins have been impacted by rising substrate costs but are poised to improve as we work through backlogs and start to realize higher average selling prices. In raw materials, we expect higher earnings driven primarily by improved realized pricing for DRI. Taken as a whole, the earnings uplift across all of our operating segments will be partially offset by higher corporate and intercompany profit eliminations upon consolidation. As we look further into 2026, we continue to expect that Nucor's earnings and cash flow will trend significantly higher than 2025 as we benefit from strong nonresidential construction and infrastructure demand and begin to see returns from the investments we've been making these past few years. With the hard work and dedication of the Nucor team, we are confident in our ability to create value for our customers and shareholders. And with that, we'd like to hear from you and answer any questions you may have. Operator, please open the line for questions.

Congratulations on a strong quarter. Congrats to the new management appointees, and thanks for the details thus far. On the West (indiscernible), which you provided some granularity, I was hoping to get a bit more color on the phasing of commissioning the strategy through year-end and maybe what to expect for the next few years? I guess, specifically, how long do you expect the commissioning phases to be complete? When do you expect the construction of the galv line to be complete? And I guess, how should we think about when you're going to start production as well as the customer qualifications? And then any sort of thoughts on utilization in the next few years as well? I appreciate that.

All right, Bill, thank you for the question. I'm going to kick it off and maybe just stay at a high level and then ask Steve Laxton or Noah to jump in with some more of the details around the commissioning of that mill. But look, I want to begin with the backdrop of our most important value, which is the safety, health and well-being of the entire Nucor 33,000 teammate family. Today, 65 of our divisions are recordable-free at this point. It is an amazing accomplishment, and I want to thank each and every one of our teams who are delivering exceptional results, and you will see and continue to see those amazing results continue as we push into the quarter. More specifically, Bill, and as we think about West Virginia, and we touched on it in the opening remarks. I and our team could not be more excited about the capability set that mill will bring and the value for our customers and our shareholders, the value that's going to be generated and created in the largest sheet-consuming region in the United States. Johnny Jacobs, who is our Vice President and GM, and his team have done an incredible job. And as you know, the work that sits behind the scenes during construction and start-up is tireless. It's thankless and it is just a really, really challenging environment. And those individuals have done an amazing job. So thank you to our entire West Virginia team. And again, I'll let Steve, Noah maybe update some more on the details.

Yes. Happy to do that. Thanks for the question, Bill. And I'll just echo what Leon said about the team in West Virginia. They've had a remarkable safety record. They've only had one reportable in all the years of that project. So outstanding safety culture and leadership in that team. And in terms of the specifics of your question, right now, Bill, we're about 85% of the way through construction. So we still have work to do on the construction side. Having said that, we're starting right now with some of the commissioning, and we'll be sequencing that throughout the year. And so we'll start with the pickle line, and then we'll bring up the cold mill and proceed through one of the galvanizing lines; the automotive quality galvanizing line will be the next thing we start up after that in commissioning. Ultimately, we'll get to commissioning the melt shop and the hot mill later in the year. By the end of this year, we'll be done with all the commissioning. We're on track to hit that milestone. And then we'll start moving up through production and ramp-up in 2027. Bill, what you'll see there is a very intentional and deliberate plan from that team and our entire sheet group. Noah and our team in the Sheet Group have really designed an excellent plan to bring that mill up in a very constructive, coordinated and intentional way. And so by the time we get to the end of 2027, you asked about utilization rates and markets are going to dictate some of that. So I might hedge here just a little bit depending on market conditions somewhat, that we'll be operating somewhere near 50% of capacity by the end of next year. And so that team is poised. We're going to make great progress over the next 1.5 years and into 2028, even with product development and continued penetration of the markets. Anything you want to add?

Great. And Steve, obviously, I've been working with you as a CFO and now we have Jack — congrats to both of you. Maybe the next question is for Jack: in your new role, how should investors think about any potential shifts in strategy relative to recent years? Anything you would continue, anything you would change or just any sort of insights on how you're considering your new role?

Yes. Thanks, Bill. I appreciate that. I step into this role with a lot of humility and gratitude to serve this great company and the 33,000 teammates who make it such a special place. Preceding me in the role are four highly accomplished Nucor CFOs. Really, my goal is just to carry on their long-standing tradition of doing three things really well: maintaining a healthy balance sheet, investing for the future and generating attractive returns for our shareholders. Steve Blackstone, who's sitting right here to my right, did a terrific job during his four-year tenure, funding $15 billion in growth investments, returning $9 billion to our shareholders and improving our credit profile along the way. So that's a pretty impressive track record right there. And as the old thing goes, if it ain't broke, don't fix it. So Bill, no major shifts from that winning strategy. But what I would say is, I think I bring a fresh set of eyes, a strong understanding of this business and how we make money, and just a lot of excitement to accelerate what is already one of the most compelling stories in American manufacturing.

A couple of questions. I'll ask them together, if that's okay. Firstly, on the sheet side, the new slow and steady approach to price hikes in this cycle that we're seeing right now, could you maybe discuss the rationale a little bit there and how the customer feedback has been? I mean I hear only good things from customers, but I'm curious. And then secondly, on structurals, demand are very, very strong. Imports are down, but don't seem to be down that much. Is there any particular subsegment that's driving structural to be so good?

Yes, I'll kick it off, Alex, thanks for the question. And again, keeping a little broader base. But the question you asked around sheet is an important one. And there's some very deliberate strategies there that I'll ask Noah to kind of walk us through because again, I think it's an important context as you overlay the backdrop of the current sheet market and demand today versus '21 and '22. You mentioned the structural side. Having spent time at Nucor-Yamato, our Nucor-Yamato team and our Berkeley beam mill continue to deliver excellent performance, both from a safety standpoint as well as from a net earnings standpoint. They are absolutely on fire. Their backlogs are at historic levels. Their customers are busier than anything that I've seen in my 30-year career. So where is that going? It's obviously the non-res data centers, energy, structural side and infrastructure around energy and chip plants and facilities, warehousing and an area that we're going to continue to see expanded into the military complex in the years to come for Nucor. So I would tell you it's hitting on all cylinders. And while data centers are white hot and everyone's looking to participate, if you pulled out all of the data center backlog from Nucor, it only takes that down about 10%. So the historic backlogs we're seeing are really spread out incredibly well across the enterprise, which gives me great confidence that not only, as we indicated, Q2 will be better, but I think 2026 is going to be a very strong year for Nucor. So with that, Noah, why don't you walk through a little bit of the sheet strategy and where we sit today.

Thanks for the question, Alex. We like slow and steady, and our customers like slow and steady, so let's take a little time to unpack that. The fundamentals supporting pricing right now are really strong, and I would say the rally we're in is probably the strongest fundamentals we've seen for some time. Maybe to give you some context for how we see the rest of 2026, step back to the last inflection point in the market, which was Q4 of last year. Think about how our strategies work differently this year. Historically, what would have happened at that trough in the market is we would have had opportunistic speculative buyers overloading their order books to try to time the market. The result would have been that we would have overbooked on the mill side, lead times would have jumped significantly, prices would have jumped significantly and we would have really overshot basic market fundamentals. Then due to the spreads and the lead times we would inevitably create the surge of imports that arrived a few months later, similar to what we saw in the back half of '24. That's what usually happens. We've seen this time and time again in the sheet world. But this time, our trajectory and our behavior has been markedly different in this cycle. We didn't chase the market down in Q4. We managed our order book to match what we saw as true underlying demand. And you saw this reflected in our steady, modest, consistent approach with pricing — consistent modest increases that were supported by underlying demand. And this is one factor that we believe has helped to keep imports low. If you think back to '24 and you saw imports that were roughly 9 million tons, this year, we're tracking around 4 million tons or under. So there's a roughly 5 million-ton window of serviceable market for domestic suppliers. That's a huge impact to the positivity with which we see the market today. And then as importantly, the supply chain is really healthy right now. Inventory levels are modest, which just tells you we haven't seen the speculation that traditionally drives the volatility we would see in this market. A couple of other notes just on the strength of the current market while we have a pretty positive outlook. We have some key markets that are starting to show signs of positive outlook. Service center shipments are starting to move up. They're trending up. We heard from HVAC customers recently that are really in the nonresidential construction space about a really strong second half there. So there's some tailwinds there in nonresidential construction that yield some strength as well. And then you already heard mention of the border defense program, which is roughly one to 1.5 million tons over this year and next. So all that together, we believe, supports a strong operating environment through 2026 and then into potentially next year.

I wanted to follow up, if I could, on the guidance comments. So the 5% year-over-year volume increase would seem to imply that this level that we saw in the first quarter year-over-year is not sustainable. So I'm just curious about what's driving that expectation? I conclude just looking at the values that perhaps the bigger driver into Q2 could be price catching up with the market rather than volumes. Is that a fair conclusion? And if you could comment a little bit more about the moving parts, that would be great.

Yes, Tim, look, I think both are true. I think you'll see volumes — Nucor's operating rate is about 87% right now, utilization across the board, some groups being a little higher, some a little lower. So we have room. From a contract standpoint, when you think about the sheet market and the things Noah just walked through, we remain with tons available in a very strong market. We maintained some discipline at not booking all of those tons through contracts, so we have spot tons to offer. But again, we still have availability, and I think you're going to see that continue to move up with the demand drivers. I'm not going to underplay this — I've been in this business a long time. Our customers that I'm talking to today are busier than anything they've ever seen in their history. So when I tell you the demand drivers today are like '21, '22 or even beyond in some cases, depending on the product group, it is an incredible market. So I do think you're going to see some improvements in volume. To your point on the 5% — yes, I think you're right that pricing catching up is a meaningful contributor. But I think volumes could push closer to double digits; I'm not saying it will be 10%, but I think it will be well above that 5% mark. So you're going to see that move up as well. Did I miss anything there, Tim?

I think that's fair. I think I just — it would always be helpful to get a little bit more color on how to think about some of the lags in pricing if you want, that would be great. And then I guess, the second question: we all track scrap really closely and that's a key one, but I just wondered if you could elaborate on some of the cost pressures that you alluded to earlier in the script, that would be great.

Yes. Steve, actually, why don't I take both — the cost as well as the lag effect on pricing — which I think will play through very positively as we head into Q2. On the lag effect, just to elaborate a bit: some of our downstream volume goes to our downstream businesses, and that gets in our financial results backed out through intercompany eliminations. So you see that impacting financial results for us. Also, with over 70% to 80% of our business in sheet being contract and some other businesses that have a lag effect to pricing, as pricing trends move up, there is this catch-up effect that takes time. So you'll see some volume pickup and you'll see pricing catch up. On the sheet side, you're going to see pricing catching up with the trends you're seeing today in the marketplace, which puts a finer point on your question about the lag effect. Regarding cost, Nucor's course costs have been down year-over-year and quarter-over-quarter. I think that's important to note, and a lot of that has to do with utilization — our utilization is up — and supplies and services are down on a few other details. The one area that is up that might be on investors' minds is energy, but energy is around 10% of the cost in steelmaking and it probably has a far less pronounced impact than some investors might think because of what some of our integrated competition has in terms of their costs. Our profile is different there. We hedge typically anywhere between 40% to 50% of the year's worth of natural gas heading into it. And most of our energy cost, roughly 80%, is related to power anyway. So we don't have quite the same degree of exposure to near-term moves in natural gas costs. We have also taken positions over time, including investments in potential long-duration power sources, and we maintain strong relationships with utilities in every state where we have a mill so that we have reliable, long-term, cost-effective arrangements.

Could I ask about the capital return? So in recent years, Nucor has exceeded the 40% net income return. I mean, last year, it was just under 70% — is there room to push that higher in 2026? And how are you thinking about that? And then the corollary to that would be looking at the investment opportunity set, are you seeing any new opportunities in which to invest in the business that could compete for that free cash flow versus capital return?

Lawson, it's Jack. Thanks for the question. In terms of returns to shareholders, I think over the past five years, we've trended close to 60% of net earnings over that time. Starting out the first quarter a touch under that 40% target, and that was really the result of our earnings beat. So as we work our way further into the year, you should expect us to continue to close that gap and potentially exceed it. But when it comes to actual returns to shareholders, it's sort of that balancing act between staying true to our long-standing targets of roughly 40%, recently higher, but also being opportunistic about other areas to create value for shareholders. A lot of that is through reinvestment. So we'll continue to balance reinvestment opportunities as they come along, maintain a healthy balance sheet along the way and make good on our commitment to shareholders.

Okay. That's quite clear. And Jack, congratulations on the promotion. If I could ask follow-up questions related to joist and deck. You noted that pricing is expected to recover to help offset some of the higher substrate costs going forward in 2026. Can you just speak to some of the strength and weakness that you're seeing in the underlying market for that business?

I'll take that question, Lawson. So really, the biggest market for the joist and deck business is the warehouse market. That's really in a steady state. It's certainly not what it was in '21 or '22, but it's leveled off to a good position. The data center market continues to be really strong for us. That's where we're seeing a lot of our price increasing. Our backlog pricing has benefited from that and will continue to over the course of the year. So we feel good about where we are in that part of the business.

Earlier, you mentioned the recent change to Section 232 tariffs impacting derivative products. Have you since then seen an increase in inquiries from manufacturers that could potentially try to reduce the impact? Or do you expect that to happen?

Got you. I want to make sure I understand the question. With the Section 232 changes, are we seeing customers look to shore up their supply chains domestically? Yes, we absolutely are. I think what you've seen recently is a set of actions that create a longer-term fair playing field. Import levels have trended down to 15%, which is certainly the lowest I've seen in my entire career at Nucor. So it's at a healthy and, I believe, sustainable level for the U.S. industry. Our customers are certainly aware of the incentives to use domestic steel and are looking to control their supply chains and costs. We will support 'made in America' provisions of trade policy that are enacted. The domestic industry is healthy and strong, and Nucor's best days are still in front of us.

And maybe going back to the energy side. I understand that it's only 10% of costs today, but maybe looking more longer term, given the expectation data centers are going to consume more energy and power costs are going to move higher, how are you thinking about your power costs longer term? Are you considering longer-term contracts or other measures? How should we think about it?

Yes, Katja. This is something we've talked about for a long time. Very early in my tenure as CEO in 2020, we've taken positions in companies like NuScale Power, which is small modular reactor technology, because we need all the reliable power we can get — not just solar and wind, which are valuable but intermittent. We believe the U.S. needs to re-embrace nuclear power. It's the cleanest, most sustainable, always-on source that can be brought to the grid. You saw us invest in NuScale and in Helion; we're excited about these technologies. Those investments are also tied to the possibility of building behind-the-meter capacity so we could generate some of our own supply, with any excess going to the grid. We've been thoughtful about this for a long time. We hedge portions of our natural gas exposure, we've pursued opportunities to secure our own wells and resources, and we maintain long-term relationships with utilities to secure reliable and cost-effective power contracts. Do I expect pressure on power costs in the years to come? Absolutely. Data centers now are massive power consumers, pushing to gigawatts. These facilities are transformational for the economy, and we have to plan accordingly. We continue to invest and advocate for the power infrastructure needed to support growth in data centers, AI, and other industries, because reliable power is critical to U.S. competitiveness.

So a couple of questions that are basically follow-ups from prior inquiries. One is on returning money to shareholders. As your CapEx starts to peak and you get the benefit of the new projects, would you have any preference between incremental buybacks or special dividends? Or are you agnostic to those two choices? And then the other question is related to imports. The administration recently put out procedures for submissions by steel or aluminum producers that would be committed to new capacity in the U.S. This is related to the proclamation on imports of medium and heavy-duty vehicles and vehicle parts. How do you think this could impact potentially the announcement of new steel capacity in the U.S.?

Yes. Thanks for the question, Carlos. With respect to the best way to return cash to shareholders, traditionally our preference has been through share buybacks and dollar-cost-averaging our way through the year. There have been very few instances over decades in which we've contemplated a special dividend, and while we wouldn't take that entirely off the table, our traditional practice has been buybacks. In the near term, as CapEx moderates and free cash flow improves, you should expect us to continue balancing reinvestment, balance sheet strength and returns to shareholders.

And then the other question is related to imports. The administration recently put out procedures for submissions by steel or aluminum producers that would be committed to new capacity in the U.S. This is related to the proclamation on imports of medium and heavy-duty vehicles and vehicle parts. How do you think this could impact potentially the announcement of new steel capacity in the U.S.?

Look, Carlos, I think it's a fair question. We've seen interest from overseas in building in the U.S. — you saw Nippon Steel and other companies invest in U.S. assets, and you see Hyundai building a sheet mill in Louisiana. There are drivers to that beyond trade policy: the U.S. market is strong and attractive. When the market is as strong as it is, people want to come here and build things. There are incentives, and we welcome investments that grow domestic capacity. Ben, maybe just touch on some more specifics to Carlos' question.

Yes, Carlos, I appreciate the question. We're obviously aware of that executive order and related procedures. We've studied it as well. I wouldn't add much more than Leon did. We continue to study the details. A lot of companies will tend to move toward the U.S. market as it remains strong. However, on that executive order, we're still taking a wait-and-see approach along with many other stakeholders as the procedures and implementation details are clarified.

I just want to double-click on Timna's question in response from earlier. So, the guide from 4Q was about 5% volume growth, and now it sounds like Nucor is expecting more than 5% volume growth for the year. You sound pretty positive and constructive on that in the environment. So I'm just trying to get any more color on what specifically has changed over the past, I guess, two to three months? Are you more positive on the end markets? Does that give you conviction heading into the back half of the year? Are certain end markets seeing stronger-than-anticipated rate of change over the past two months, imports weaker than thought, or what are you seeing potentially across the backlog? Any additional color would be helpful.

Yes, Nick, look, I appreciate the question. I think you're seeing a trifecta come to fruition. I'll unpack it in three categories. One: in our core businesses, we're seeing incredible demand and growth. Our long products groups from rebar to MBQ to structural — backlogs are beyond numbers we've ever seen. Our customers' customers in nonresidential construction and structural fabricators are incredibly busy. There is a very robust demand picture today. Two: our expanded businesses are continuing to ramp up. When we talk about insulated metal panels, door technologies, towers and structures, and greenfield plants we're building, these are contributing meaningfully. We're excited about what they're bringing to the table. Three: since I became CEO, we've invested nearly $20 billion, and our teams have done an incredible job implementing that capital — construction, commissioning, start-up. You're beginning to see some of those projects reach EBITDA-positive levels and contribute to the business. You're beginning to see the harvest hit the balance sheet, and that will continue. The pent-up earnings power from the investments is still to come. That combination gives me strong optimism for the balance of 2026 and beyond. Nucor's best days, weeks, months and years are still ahead, and those three pieces are why we feel very confident about 2026 and beyond.

We currently have no further questions. So I'd like to hand back to Leon Topalian, Chair and CEO, for any closing remarks.

Well, thank you all for joining us on today's call. And before I conclude, I want to once again thank our team for delivering a strong start to our year and also for your unwavering commitment to becoming the world's safest steel company. I'd also like to thank our customers for the trust that you place in us each and every day. And finally, to our investors for your continued confidence in our long-term strategy. Thank you, and have a great day.