Nucor is gearing as much as considerably improve its manufacturing for the automotive finish market because the business experiences a gross sales rebound, CEO Leon Topalian instructed CNBC’s Jim Cramer Thursday.
“We’re about 1.6 million tons a year of our products going to automotive. Will double that in the next several years,” he stated in a “Mad Money” interview. “Want to be at the 3 million range.”
U.S. automakers, which had been shut down for a interval on the onset of the coronavirus outbreak, skilled an surprising degree of demand for automobiles amid the pandemic-induced recession. Car producers have sprung into motion to spice up inventories and ship new automobiles to dealerships as used automotive inventories additionally face outsized demand.
Wholesale used automobile costs had been up nearly 20% 12 months over 12 months in August, in accordance with Moody’s Analytics. Nucor, which produces superior metal sheets, engineered bar and cold-finished metal merchandise for automobiles, reported seeing a robust restoration in automotive demand. The firm expects manufacturing charges for the present quarter may exceed the final quarter of 2019.
“Automotive is going to continue to be a big part of our business as we move forward,” Topalian stated.
Nucor shares closed up 3% at $49.90 Thursday after saying third-quarter outcomes in the morning. The Charlotte, North Carolina-based steelmaker topped analyst estimates handily with earnings of 63 cents per share on income of $4.9 billion. Business was down about 10% from the identical quarter final 12 months when the corporate introduced in about $5.47 billion.
While the metal and broader financial system proceed to really feel the impression of the coronavirus slowdown, Topalian stated Nucor expects to provide a big return for shareholders as the corporate tries to not get too “focused on the moment.”
“Nucor’s investments are for the long term and we can’t lose sight of that,” he stated.
While Nucor inventory stays down 11% this 12 months, the inventory closed Thursday’s session at its highest worth since February, recovering all of its losses because the historic market meltdown that started that month.
The inventory has gained 81% since reaching a backside in late March.