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Nucor Scoops Up Assets of Canada-based Steel Joist Maker
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Steel giant Nucor (NUE - Free Report) has purchased the assets of Omega Joist – a unit of Samuel, Son & Co., Limited – for an undisclosed price. Canada-based Omega Joist makes open web steel joists at its manufacturing plant located in Nisku, Alberta.
Omega Joist will become part of Nucor's eleven other joist and deck production plants and will operate as Vulcraft-Omega. Nucor intends to add other products to Vulcraft-Omega's product portfolio including steel deck. Vulcraft-Omega is Nucor's fifth facility in Alberta.
The buyout allows Nucor to grow its joist and decking business in Canada. It also complements the Vulcraft plant that the company is currently building in Ancaster, Ontario.
Nucor remains committed to expand its production capabilities and grow its business through strategic acquisitions. The company, in Nov 2016, completed its buyout of Chicago-based Independence Tube Corporation (“ITC”) for $435 million. The addition of ITC to Nucor’s portfolio allows the latter to offer a broader selection of products to its fabricator and service center customers and reinforce the company's foothold in the key non-residential construction end-use market.
Nucor, earlier this year, also wrapped up its purchase of steel electrical conduit maker, Republic Conduit, from Luxembourg-based Tenaris S.A. for $335 million. Republic Conduit is a leading producer of steel electrical conduit in North America. The acquisition makes Nucor the market leader in steel conduits. Moreover, the company acquired Southland Tube for $130 million in Jan 2017. The buyout strengthens Nucor’s foothold in the hollow structural section (“HSS”) steel tubing maker.
Nucor has underperformed the Zacks categorized Steel-Producers industry over a year. The company's shares gained 49.8% over this period while the industry saw a gain of 64.2%.
Nucor swung to a profit in fourth-quarter 2016. Earnings and sales for the quarter topped the respective Zacks Consensus Estimate. However, Nucor saw a decline in operating performance in its Steel Mills segment in the fourth quarter compared with the previous quarter, hurt by lower margins with the most significant impact was witnessed at the company’s sheet mills.
The performance of Nucor’s Raw Materials segment in the fourth quarter also declined compared to the third due to lower pricing at its direct reduced iron (“DRI”) facilities. Nucor also saw reduced profitability in its Steel Products segment on a sequential comparison basis in the fourth quarter.
Nucor expects earnings in first-quarter 2017 to increase on a sequential comparison basis. The company expects improved volume in the first quarter for the Steel Mills segment compared with the fourth. The Raw Materials segment is also expected to return to profitability in the first quarter on higher scrap prices and pricing improvement at its DRI facilities. However, the company envisions a decline in profitability in its Steel Products segment in the first quarter versus the fourth.
U.S. Steel has an expected long-term growth of 8%.
Ternium has an expected long-term growth of 18.4%.
Angang Steel has an expected earnings growth rate of 45.3% for the current year.
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Nucor Scoops Up Assets of Canada-based Steel Joist Maker
Steel giant Nucor (NUE - Free Report) has purchased the assets of Omega Joist – a unit of Samuel, Son & Co., Limited – for an undisclosed price. Canada-based Omega Joist makes open web steel joists at its manufacturing plant located in Nisku, Alberta.
Omega Joist will become part of Nucor's eleven other joist and deck production plants and will operate as Vulcraft-Omega. Nucor intends to add other products to Vulcraft-Omega's product portfolio including steel deck. Vulcraft-Omega is Nucor's fifth facility in Alberta.
The buyout allows Nucor to grow its joist and decking business in Canada. It also complements the Vulcraft plant that the company is currently building in Ancaster, Ontario.
Nucor remains committed to expand its production capabilities and grow its business through strategic acquisitions. The company, in Nov 2016, completed its buyout of Chicago-based Independence Tube Corporation (“ITC”) for $435 million. The addition of ITC to Nucor’s portfolio allows the latter to offer a broader selection of products to its fabricator and service center customers and reinforce the company's foothold in the key non-residential construction end-use market.
Nucor, earlier this year, also wrapped up its purchase of steel electrical conduit maker, Republic Conduit, from Luxembourg-based Tenaris S.A. for $335 million. Republic Conduit is a leading producer of steel electrical conduit in North America. The acquisition makes Nucor the market leader in steel conduits. Moreover, the company acquired Southland Tube for $130 million in Jan 2017. The buyout strengthens Nucor’s foothold in the hollow structural section (“HSS”) steel tubing maker.
Nucor has underperformed the Zacks categorized Steel-Producers industry over a year. The company's shares gained 49.8% over this period while the industry saw a gain of 64.2%.
Nucor swung to a profit in fourth-quarter 2016. Earnings and sales for the quarter topped the respective Zacks Consensus Estimate. However, Nucor saw a decline in operating performance in its Steel Mills segment in the fourth quarter compared with the previous quarter, hurt by lower margins with the most significant impact was witnessed at the company’s sheet mills.
The performance of Nucor’s Raw Materials segment in the fourth quarter also declined compared to the third due to lower pricing at its direct reduced iron (“DRI”) facilities. Nucor also saw reduced profitability in its Steel Products segment on a sequential comparison basis in the fourth quarter.
Nucor expects earnings in first-quarter 2017 to increase on a sequential comparison basis. The company expects improved volume in the first quarter for the Steel Mills segment compared with the fourth. The Raw Materials segment is also expected to return to profitability in the first quarter on higher scrap prices and pricing improvement at its DRI facilities. However, the company envisions a decline in profitability in its Steel Products segment in the first quarter versus the fourth.
Nucor currently carries a Zacks Rank #3 (Hold).
Nucor Corporation Price and EPS Surprise
Nucor Corporation Price and EPS Surprise | Nucor Corporation Quote
Stocks to Consider
Better-placed companies in the steel space include United States Steel Corporation (X - Free Report) , Ternium S.A. (TX - Free Report) and Angang Steel Company Limited , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
U.S. Steel has an expected long-term growth of 8%.
Ternium has an expected long-term growth of 18.4%.
Angang Steel has an expected earnings growth rate of 45.3% 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 >>