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Why Is Nucor Corp (NUE) Up 12.4% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Nucor Corporation (NUE - Free Report) . Shares have added about 12.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Nucor Tops Earnings, Revenue Estimates in Q4
Nucor recorded a profit of $159.6 million or $0.50 per share for the fourth quarter of 2016 versus a loss of $187.5 million or $0.59 per share registered a year ago. Earnings per share for the reported quarter outstripped the Zacks Consensus Estimate of $0.34.
Revenues rose around 14% year over year to $3,956.5 million in the reported quarter. Sales also comfortably beat the Zacks Consensus Estimate of $3,780 million.
For full-year 2016, the steel giant logged a profit of $796.3 million or $2.48 per share, up from a profit of $80.7 million or $0.25 per share in 2015.
Sales for the full year edged down 1% year over year to $16,208.1 million.
Operating Stats
Total steel mills shipments in the fourth quarter were 5,151,000 tons, up 16% year over year. Total tons shipped to outside customers were up 14% year over year to 5,815,000 tons. Average sales price in the quarter were flat year over year. Steel mill operating rates rose to 74% in the reported quarter from 68% a year ago.
Segment Highlights
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 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 due to year-end seasonality.
Financial Position
Nucor ended 2016 with a strong liquidity position with cash and cash equivalents increasing roughly 5% year over year to around $2,046 million. Long-term debt was $3,739.1 million, down around 14% year over year.
Outlook
Moving ahead, Nucor expects earnings in first-quarter 2017 to increase on a sequential comparison basis. It also expects profitability for full-year 2017 to significantly exceed the level achieved in 2016.
Nucor noted that prices started to rise in the fourth quarter for its Steel Mills unit, which the company expects to continue in the first quarter. It also expects improved volume in the first quarter for the Steel Mills segment compared with the fourth, especially at its sheet and plate mills.
The company envisions a decline in profitability in its Steel Products segment in the first quarter versus the fourth due to seasonality. However, the company expects the Raw Materials segment to return to profitability in the first quarter on higher scrap prices and pricing improvement at its DRI facilities.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been three revisions lower for the current quarter. In the past month, the consensus estimate has shifted 19.3% downward due to these changes.
At this time, Nucor Corp's stock has a nice Growth Score of 'B', though it is lagging a bit on the momentum front with a 'C'. Charting a somewhat similar path, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for value and growth investors while momentum investors may want to look elsewhere.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Why Is Nucor Corp (NUE) Up 12.4% Since the Last Earnings Report?
It has been about a month since the last earnings report for Nucor Corporation (NUE - Free Report) . Shares have added about 12.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Nucor Tops Earnings, Revenue Estimates in Q4
Nucor recorded a profit of $159.6 million or $0.50 per share for the fourth quarter of 2016 versus a loss of $187.5 million or $0.59 per share registered a year ago. Earnings per share for the reported quarter outstripped the Zacks Consensus Estimate of $0.34.
Revenues rose around 14% year over year to $3,956.5 million in the reported quarter. Sales also comfortably beat the Zacks Consensus Estimate of $3,780 million.
For full-year 2016, the steel giant logged a profit of $796.3 million or $2.48 per share, up from a profit of $80.7 million or $0.25 per share in 2015.
Sales for the full year edged down 1% year over year to $16,208.1 million.
Operating Stats
Total steel mills shipments in the fourth quarter were 5,151,000 tons, up 16% year over year. Total tons shipped to outside customers were up 14% year over year to 5,815,000 tons. Average sales price in the quarter were flat year over year. Steel mill operating rates rose to 74% in the reported quarter from 68% a year ago.
Segment Highlights
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 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 due to year-end seasonality.
Financial Position
Nucor ended 2016 with a strong liquidity position with cash and cash equivalents increasing roughly 5% year over year to around $2,046 million. Long-term debt was $3,739.1 million, down around 14% year over year.
Outlook
Moving ahead, Nucor expects earnings in first-quarter 2017 to increase on a sequential comparison basis. It also expects profitability for full-year 2017 to significantly exceed the level achieved in 2016.
Nucor noted that prices started to rise in the fourth quarter for its Steel Mills unit, which the company expects to continue in the first quarter. It also expects improved volume in the first quarter for the Steel Mills segment compared with the fourth, especially at its sheet and plate mills.
The company envisions a decline in profitability in its Steel Products segment in the first quarter versus the fourth due to seasonality. However, the company expects the Raw Materials segment to return to profitability in the first quarter on higher scrap prices and pricing improvement at its DRI facilities.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been three revisions lower for the current quarter. In the past month, the consensus estimate has shifted 19.3% downward due to these changes.
Nucor Corporation Price and Consensus
Nucor Corporation Price and Consensus | Nucor Corporation Quote
VGM Scores
At this time, Nucor Corp's stock has a nice Growth Score of 'B', though it is lagging a bit on the momentum front with a 'C'. Charting a somewhat similar path, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for value and growth investors while momentum investors may want to look elsewhere.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.