Nucor Corp., a leading steel producer in the U.S., will have a hand in developing parts for products offered by Array Technologies Inc., an Albuquerque-based solar company that went public last year.
The two companies entered into an agreement for Nucor to produce certain components of Array's solar tracking system, as well as support the development of components for future Array products. Nucor will supply rolled steel and steel tubes for Array's production of "clamps, foundations and brackets," according to a release from Array. The company makes solar trackers, which move solar panels depending on the position of the sun, to maximize energy production.
"As Array invests in innovation and develops technologies that will decrease installation time and bring down levelized cost of energy for our customers, we are proud to say that our products will be made with sustainably sourced materials,” said Jim Fusaro, Array Technologies CEO, in a statement. Nucor, headquartered in Charlotte, North Carolina, processes 22 million tons of scrap each year, according to subsidiary Nucor Building Systems.
For Nucor (NYSE: NUE), the deal comes after it reported net income of $942 million for the first quarter, or $3.10 per share, on $7.02 billion in revenue — a record quarter for the steelmaker. The company in also in the final stages of what had been a $4 billion capital spending program largely focused on major plant upgrades and new plant construction, according to the Charlotte Business Journal.
Array Technologies (Nasdaq: ARRY) saw its stock price fall yesterday following its quarterly earnings report. As part of the report, the company missed its quarterly profit expectation and withdrew its full-year outlook, citing increases in steel and freight costs, according to Market Watch. Revenue for the quarter stood at $245 million, with $2.9 million in net income.
"At the same time as we are seeing record demand for solar, our industry is contending with increases in steel and shipping costs that are unprecedented both in their magnitude and rate of change. From Q1 2020 to Q1 2021, spot prices of hot rolled coil steel, the primary raw material used in our products, more than doubled and have continued to increase in the second quarter," Fusaro said as part of the earnings report. "Steel represents almost half of our cost of goods sold and we do not hold large amounts of steel inventory, so a significant increase in the price of steel over a short period of time can negatively impact our results."
Array Technologies went public in October with a $1 billion initial public offering. Reuters reported that the offering valued Array at $2.8 billion. In looking to the future, the company had previously presented a positive outlook.
In a February analyst presentation, it highlighted the potential for increased demand for utility-scale solar under President Joe Biden's administration. Biden has had several stated policy objectives that could increase the need for renewable energy sources, such as solar and wind.
Those things could lead to a quicker adoption of solar in the U.S., which could benefit Array Technologies and its shareholders, Business First reported.
