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Nucor Gives Weak View for Q4, Sees Improvement in FY17
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Nucor (NUE - Free Report) has provided downbeat guidance for the final quarter of 2016. The steel giant sees earnings for the fourth quarter to be in the band of 30 cents to 35 cents per share. That is a decrease from 84 cents per share recorded in the previous quarter and 45 cents a share it earned a year ago. Analysts polled by Zacks currently expect earnings of 37 cents a share on an average for the quarter.
Nucor’s fourth-quarter guidance include an estimated LIFO expense of $35.3 million or 7 cents per share versus an expense of $59.3 million or 12 cents per share in the third quarter of 2016 and a LIFO credit of $217.8 million or 41 cents per share in the fourth quarter of 2015.
Nucor said that the expected decline in fourth-quarter earnings on a sequential comparison basis mainly reflects lower margins in the steel mills segment, with the most significant impact at its sheet mills.
The company expects a significant decline in performance in the Raw Materials segment in the fourth quarter compared with the third on lower pricing in its direct reduced iron (“DRI”) facilities. Nucor also envisions reduced profitability in its Steel Products segment on a sequential comparison basis in the fourth quarter due to year-end seasonality.
While market conditions for the steel mills unit have been marked by volatility in selling prices and demand this year, the company sees improvement moving ahead in 2017. Nucor saw improved pricing for sheet, bar, structural and plate mills during the fourth quarter. Prices of scrap and other commodities are also improving of late. Nucor noted that declining steel imports and higher input costs are causing the market to find an improved and more sustainable level which the company expects to be beneficial in 2017.
Favorable developments on steel trade cases initiated by the U.S. steel industry have resulted in a roughly 19% year over year decline in steel imports this year. Positive final rulings announced earlier this year in trade cases involving corrosion-resistant, cold-rolled and hot-rolled steel have marked a key step in returning fair trade to the U.S. flat-rolled steel market.
Nucor 's shares fell around 3.5% to close at $60.65 last Friday.
Nucor has underperformed the Zacks categorized ‘Steel-Producers’ industry over the past three months, partly attributable to its lower-than-expected results in third-quarter 2016. The company’s shares have gained around 31.8% over this period, compared with roughly 35.3% gain recorded by the industry.
Nucor’s adjusted earnings of 88 cents per share for the third quarter missed the Zacks Consensus Estimate of 90 cents. Moreover, revenues of $4,290.2 million trailed the Zacks Consensus Estimate of $4,539 million. Nucor remains exposed to certain macro-economic difficulties and is also seeing weak demand across a number of markets including energy.
Nucor is a Zacks Rank #3 (Hold) stock.
Other Stocks to Consider
Better-ranked companies in the steel space include POSCO (PKX - Free Report) , AK Steel Holding Corporation and Schnitzer Steel Industries, Inc. .
AK Steel has an expected earnings growth of around 208.8% for the current year. The stock carries a Zacks Rank #2 (Buy).
Schnitzer Steel carries a Zacks Rank #2 and has an expected earnings growth of around 84.1% for the current year.
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Nucor Gives Weak View for Q4, Sees Improvement in FY17
Nucor (NUE - Free Report) has provided downbeat guidance for the final quarter of 2016. The steel giant sees earnings for the fourth quarter to be in the band of 30 cents to 35 cents per share. That is a decrease from 84 cents per share recorded in the previous quarter and 45 cents a share it earned a year ago. Analysts polled by Zacks currently expect earnings of 37 cents a share on an average for the quarter.
Nucor’s fourth-quarter guidance include an estimated LIFO expense of $35.3 million or 7 cents per share versus an expense of $59.3 million or 12 cents per share in the third quarter of 2016 and a LIFO credit of $217.8 million or 41 cents per share in the fourth quarter of 2015.
Nucor said that the expected decline in fourth-quarter earnings on a sequential comparison basis mainly reflects lower margins in the steel mills segment, with the most significant impact at its sheet mills.
The company expects a significant decline in performance in the Raw Materials segment in the fourth quarter compared with the third on lower pricing in its direct reduced iron (“DRI”) facilities. Nucor also envisions reduced profitability in its Steel Products segment on a sequential comparison basis in the fourth quarter due to year-end seasonality.
While market conditions for the steel mills unit have been marked by volatility in selling prices and demand this year, the company sees improvement moving ahead in 2017. Nucor saw improved pricing for sheet, bar, structural and plate mills during the fourth quarter. Prices of scrap and other commodities are also improving of late. Nucor noted that declining steel imports and higher input costs are causing the market to find an improved and more sustainable level which the company expects to be beneficial in 2017.
Favorable developments on steel trade cases initiated by the U.S. steel industry have resulted in a roughly 19% year over year decline in steel imports this year. Positive final rulings announced earlier this year in trade cases involving corrosion-resistant, cold-rolled and hot-rolled steel have marked a key step in returning fair trade to the U.S. flat-rolled steel market.
Nucor 's shares fell around 3.5% to close at $60.65 last Friday.
NUCOR CORP Price
NUCOR CORP Price | NUCOR CORP Quote
Nucor has underperformed the Zacks categorized ‘Steel-Producers’ industry over the past three months, partly attributable to its lower-than-expected results in third-quarter 2016. The company’s shares have gained around 31.8% over this period, compared with roughly 35.3% gain recorded by the industry.
Nucor’s adjusted earnings of 88 cents per share for the third quarter missed the Zacks Consensus Estimate of 90 cents. Moreover, revenues of $4,290.2 million trailed the Zacks Consensus Estimate of $4,539 million. Nucor remains exposed to certain macro-economic difficulties and is also seeing weak demand across a number of markets including energy.
Nucor is a Zacks Rank #3 (Hold) stock.
Other Stocks to Consider
Better-ranked companies in the steel space include POSCO (PKX - Free Report) , AK Steel Holding Corporation and Schnitzer Steel Industries, Inc. .
POSCO sports a Zacks Rank #1 (Strong Buy). The company has an expected earnings growth of around 857.1% for the current year. You can see the complete list of today’s Zacks #1 Rank stocks here.
AK Steel has an expected earnings growth of around 208.8% for the current year. The stock carries a Zacks Rank #2 (Buy).
Schnitzer Steel carries a Zacks Rank #2 and has an expected earnings growth of around 84.1% for the current year.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>