Leon J. Topalian
Chair, President and Chief Executive Officer at Nucor
Good afternoon, and thank you for joining us for our third quarter earnings call. Joining the call today are other members of Nucor's executive team, including Dave Sumoski, Chief Operating Officer; Steve Laxton, Chief Financial Officer; Al Behr, responsible for Plate and Structural Products; John Hollatz, responsible for Bar, Engineered Bar and Rebar Fab; Greg Murphy, responsible for Business Services and our General Counsel; Dan Needham, responsible for our Commercial Strategy; Rex Query, responsible for Sheet and Tubular Products; and Chad Utermark, responsible for New Markets and Innovation.
As our teammates continue to serve our customers and what we anticipate will be a record year for Nucor financially, we've not lost focus on our most important goal of becoming the world's safest steel company. After two record-setting safety years in 2020 and 2021, we are on pace for the safest year in Nucor's history in 2022.
I want to acknowledge the progress demonstrated by all of our teammates as they continue to take care of our most important value. I'd also like to thank and give a shout out to our Sheet and Engineered Bar teams for achieving world-class safety performance so far this year, and I want to encourage all of our team members to maintain their focus on safety so we can again achieve our most important goal that we have set for our company.
Regarding our financial results in the third quarter, we posted earnings of $6.50 per share. And through the first nine months of this year, we have earned $23.85 per diluted share, setting an all-time record for Nucor Corporation. Our earnings in the third quarter were down compared to the record high levels we achieved in the first two quarters of the year. And as we indicated in our guidance, earnings from our steel mill segments were lower in the third quarter due to metal margin contraction and reduced shipping volumes, particularly at our sheet and plate mills. Prices have decreased more rapidly than our raw material costs, and we've also had planned outages at several of our mills.
The ongoing war in Ukraine, dynamic changes in energy cost and shifting monetary policy have amplified economic uncertainty. Even with this uncertainty, we continue to see good demand here in the United States, particularly in our steel products segments, which had strong earnings again in the third quarter. Their performance was largely the result of continued robust demand from the nonres construction market. U.S. Census Bureau data reflects that the total domestic nonres construction spending hit a record in August at $79.4 billion. Steve Laxton is going to provide more details on the financial performance of our three business segments and the outlook for the final quarter of the year. Although increased economic uncertainty and lower pricing for many steel grades means it's unlikely we'll see more record highs for the rest of the year, we believe that the medium- and long-term outlook for our business is quite positive. We continue to execute on our various capital investment projects so that we're well positioned to seize market opportunities as they evolve. Consistent reinvestment in our businesses has been the critical factor enabling value creation by our team over the years.
The construction and start-up of our Nucor Steel Brandenburg Plate Mill continues to progress incredibly well with respect to safety, budget and schedule. The Brandenburg team is delivering one of the safest construction projects in Nucor's history. The Brandenburg team has already commissioned the electric arc furnace, the ladle metallurgical furnace and anticipates commissioning the vacuum tank degasser and caster in the next several weeks. Commissioning is also underway in the rolling mill area, positioning the team to produce its first plate products by year's end.
The start-up this year will have our state-of-the-art mill ready to enter the market in 2023. We also announced that Brandenburg is publicly registered to pursue LEED v4 for building and design certification. In a continued trend of environmental leadership as a company, Nucor Steel Brandenburg is the first steel mill in the world to pursue certification under LEED v4, which is more stringent than previous LEED rating systems. The new plate mill will play a key role in supplying sustainable steel to build our clean energy infrastructure. It will be one of very few mills worldwide and the only one in the Western Hemisphere capable of supplying the critical steel components required to build offshore wind farms. I'd like to congratulate our entire Nucor Brandenburg team.
The ramp-up at Nucor Steel Gallatin continues to progress. Although we anticipated a full run rate production by the end of this year, we now expect that this will occur in Q1 of 2023. The majority of our start-up delays have centered around equipment sequencing and remembering that this upgrade was a complete modernization of the entire facility including new automation software throughout the mill.
This investment, combined with the galvanizing line we added in 2019, the addition of the recently purchased pickle line and the two mill currently under construction, dramatically expands the breadth of market solutions our Gallatin mill can provide. Collectively, these efforts position Gallatin with a higher, more value-added product suite and will enable our team to generate higher profit margins as we move forward. We're proud of the work our team is doing to safely bring the Gallatin facility to its full production capability for our customers.
The third quarter was also the first full quarter of operating C.H.I. Overhead Doors since closing on the acquisition in June. We continue to work closely with the C.H.I. team to integrate them into Nucor, and we are already realizing supply chain efficiencies because of the acquisition. We're also working to capitalize on incremental sales opportunities now that C.H.I. is part of Nucor. We are very excited about the growth potential of this new portion of our business, and we are on track for a record 2022 and ahead of our acquisition model expectations.
We also announced in the third quarter that we will be adding a melt shop at our Kingman, Arizona facility. The new $100 million melt shop will have the capacity to produce 600,000 metric tons annually and create approximately 140 new full-time jobs. Kingman is currently a rolling mill, and we're leveraging that existing footprint and adding melt shop capacity there to efficiently meet the growing demand for rebar in the Western U.S.
Lastly, at the End of the third quarter, we announced that the Nucor Board of Directors approved the construction of a galvanizing line at our Nucor Steel Berkeley sheet mill that is expected to begin operations in mid-2025. The Board also approved an additional galvanizing line to be constructed in the western United States with details to be announced at a future date. The new Berkeley line will be our eighth wholly-owned galv line. These investments further advance our strategy of shifting our mix to higher-margin value-added products and capitalizing on sustainability trends that are driving more growth opportunities for Nucor.
Turning to Washington for a moment. During the third quarter, Congress passed the CHIPS Act and the Inflation Reduction Act, two pieces of legislation that will strengthen domestic manufacturing and create opportunities in the future for the American steel industry. The CHIPS Act promotes semiconductor manufacturing here at home, which is strengthening our supply chains and helping us unleash a manufacturing renaissance across the United States. The Inflation Reduction Act invests in the domestic manufacturing of clean technologies to reduce emissions. It also contains provisions that encourage the procurement of American-made steel products in clean energy infrastructure. Incentives to build our clean energy future with low emission steel produced by the U.S. industry give us a competitive advantage.
And finally, as we've mentioned in previous calls, we expect to start seeing the impacts of new federal infrastructure spending in 2023 as states continue to move forward with their projects. With our expanded capabilities and sustainable steel products, we are well positioned to supply the broad array of solutions that are essential to these efforts. And we are confident that as we do so, our efficient and flexible business model and diversified product portfolio will enable us to deliver very attractive returns on our shareholders' valuable capital.
Before I turn it over to Steve, I want to thank our Nucor team for your incredible hard work and great performance through the first nine months of this year. And as we navigate the volatility and certainty in the market, we must stay focused on working safely and operating reliably to take great care of our customers. Let's finish this year having 2022 be the safest and most profitable year in Nucor's history.
Now, Steve Laxton will share with you additional details about our third quarter performance and our outlook through the end of the year. Steve?
