Back to top

Image: Bigstock

Nucor (NUE) Down 9.3% Since Earnings Report: Can It Rebound?

Read MoreHide Full Article

It has been about a month since the last earnings report for Nucor Corporation (NUE - Free Report) . Shares have lost about 9.3% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 catalysts.

Nucor's Earnings and Revenues Miss Estimates in Q2

Nucor’s second-quarter 2017 profit came in at $323 million or $1.00 per share, compared to earnings of $243.6 million or $0.76 per share it registered a year ago. Earnings per share for the reported quarter, however, trailed the Zacks Consensus Estimate of $1.07.

Revenues climbed around 22% year over year to $5,174.8 million in the reported quarter, but missed the Zacks Consensus Estimate of $5,307.8 million.

Operating Stats

Total steel mills shipments in the second quarter were 6,347,000 tons, up 7% year over year. Total tons shipped to outside customers were up 5% year over year to 6,748,000 tons. Average sales price in the quarter were up 17% year over year.

Steel mill operating rates rose to 90% in the reported quarter from 89% a year ago.

Segment Highlights

Nucor witnessed decreased profitability in its Steel Mills segment, especially bar mills and sheet mills, in the second quarter compared with the previous quarter, hurt by challenging market conditions for hot-rolled sheet products. The performance of plate mills improved on sequential basis.

The performance of Nucor’s Raw Materials segment in the second quarter improved compared with the first due to improved performance of its DRI facilities.

Nucor also witnessed improved profitability in its downstream products segment on a sequential comparison basis in the second quarter.

Financial Position

Nucor ended the quarter with cash and cash equivalents of around $1,511 million, down roughly 15.2% year over year. Long-term debt was $3,240.7 million, down around 25.3% year over year.

Outlook

Moving ahead, Nucor expects earnings in third-quarter 2017 to be in a band similar to the quarterly results of first-half 2017. The company continues to achieve greater penetration of the automotive market and expects to continue this trend for the remaining year. Nucor is also upbeat about improving prospects in the energy markets.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed a downward trend in fresh estimates. There have been two revisions lower for the current quarter.

Nucor Corporation Price and Consensus

 

Nucor Corporation Price and Consensus | Nucor Corporation Quote

VGM Scores

At this time, Nucor's stock has a subpar Growth Score of D, while it is doing a bit better on the momentum front with C. However, 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 aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

The company's stock is more suitable for value than momentum based on our styles scores.

Outlook

Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift.  Notably, the stock is a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Nucor Corporation (NUE) - free report >>

Published in