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What's in the Cards for Nucor (NUE) This Earnings Season?
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Nucor Corporation (NUE - Free Report) is set to release fourth-quarter 2017 results ahead of the bell on Jan 30.
In the last quarter, the steel giant delivered a positive earnings surprise of 1.3% by posting adjusted earnings of 79 cents per share, which surpassed the Zacks Consensus Estimate of 78 cents.
Revenues increased roughly 20.5% year over year to $5,170.1 million in the third quarter, but missed the Zacks Consensus Estimate of $5,276 million.
Nucor beat the Zacks Consensus Estimate in three of the trailing four quarters while missing in one, with an average positive surprise of 9.9%.
Shares of Nucor have moved up 16.9% in the last three months, underperforming the industry’s 18.9% growth.
Can the company surprise investors again or is it heading for a possible pullback? Let’s see how things are shaping up for this announcement.
Factors to Consider
Last month, Nucor provided its fourth-quarter 2017 guidance. The company expects earnings for the quarter in the range of 50-55 cents per share. This is a decrease from 79 cents per share recorded in the previous quarter and is comparable to 50 cents earned a year ago.
Total sales for Nucor for the fourth quarter is projected to decline by roughly 4.1% from the third quarter as the Zacks Consensus Estimate for the fourth quarter is currently pegged at $4,960 million.
Nucor believes that the overall market demand in fourth-quarter 2017 has been strong. However, expected earnings in the steel mills unit will be negatively impacted by margin compression owing to the surge of imports experienced in the summer of 2017. This pressure from imports along with weakness in plate steel has caused the company to lower fourth quarter earnings estimate for the steel mills segment. Nucor anticipates similar results for the steel products unit in the fourth quarter compared to third-quarter 2017.
Nucor Steel Louisiana witnessed an unplanned outage during fourth-quarter 2017 and resumed operations early last month. However, this outage was shorter than the unplanned outages experienced during the last quarter. Owing to this, Nucor expect earnings of the raw materials unit in the fourth quarter to improve from the third.
Nucor noted that the U.S. steel industry continues to be adversely affected by steel imports. However, the industry continues to combat unfair traded imports. The United States Department of Commerce, last year, has made several ruling imposing duties on additional steel products which are favorable for the domestic steel industry.
Notably, the automotive market continues to remain healthy and the company is increasing penetration of new automotive platforms. Nonresidential construction markets are stable at a level considerably below peak 2007 mark, while energy markets continue their recovery from the depressed levels experienced in late 2014 and 2015. Agriculture and heavy equipment are continuing to show signs of improvement and in general, Nucor is optimistic on expected overall industrial production in 2018.
Earnings Whispers
Our proven model does not conclusively show that Nucor is likely to beat the Zacks Consensus Estimate this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below:
Zacks ESP: Earnings ESP for Nucor for the fourth quarter is -4.93%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 55 cents and 58 cents, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Nucor currently carries a Zacks Rank #1, which when combined with a negative ESP, makes surprise prediction difficult.
Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
LyondellBasell Industries N.V. (LYB - Free Report) has an Earnings ESP of +0.55% and carries a Zacks Rank #2.
Kinross Gold Corporation (KGC - Free Report) has an Earnings ESP of +2.27% and carries a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
What's in the Cards for Nucor (NUE) This Earnings Season?
Nucor Corporation (NUE - Free Report) is set to release fourth-quarter 2017 results ahead of the bell on Jan 30.
In the last quarter, the steel giant delivered a positive earnings surprise of 1.3% by posting adjusted earnings of 79 cents per share, which surpassed the Zacks Consensus Estimate of 78 cents.
Revenues increased roughly 20.5% year over year to $5,170.1 million in the third quarter, but missed the Zacks Consensus Estimate of $5,276 million.
Nucor beat the Zacks Consensus Estimate in three of the trailing four quarters while missing in one, with an average positive surprise of 9.9%.
Shares of Nucor have moved up 16.9% in the last three months, underperforming the industry’s 18.9% growth.
Can the company surprise investors again or is it heading for a possible pullback? Let’s see how things are shaping up for this announcement.
Factors to Consider
Last month, Nucor provided its fourth-quarter 2017 guidance. The company expects earnings for the quarter in the range of 50-55 cents per share. This is a decrease from 79 cents per share recorded in the previous quarter and is comparable to 50 cents earned a year ago.
Total sales for Nucor for the fourth quarter is projected to decline by roughly 4.1% from the third quarter as the Zacks Consensus Estimate for the fourth quarter is currently pegged at $4,960 million.
Nucor believes that the overall market demand in fourth-quarter 2017 has been strong. However, expected earnings in the steel mills unit will be negatively impacted by margin compression owing to the surge of imports experienced in the summer of 2017. This pressure from imports along with weakness in plate steel has caused the company to lower fourth quarter earnings estimate for the steel mills segment. Nucor anticipates similar results for the steel products unit in the fourth quarter compared to third-quarter 2017.
Nucor Steel Louisiana witnessed an unplanned outage during fourth-quarter 2017 and resumed operations early last month. However, this outage was shorter than the unplanned outages experienced during the last quarter. Owing to this, Nucor expect earnings of the raw materials unit in the fourth quarter to improve from the third.
Nucor noted that the U.S. steel industry continues to be adversely affected by steel imports. However, the industry continues to combat unfair traded imports. The United States Department of Commerce, last year, has made several ruling imposing duties on additional steel products which are favorable for the domestic steel industry.
Notably, the automotive market continues to remain healthy and the company is increasing penetration of new automotive platforms. Nonresidential construction markets are stable at a level considerably below peak 2007 mark, while energy markets continue their recovery from the depressed levels experienced in late 2014 and 2015. Agriculture and heavy equipment are continuing to show signs of improvement and in general, Nucor is optimistic on expected overall industrial production in 2018.
Earnings Whispers
Our proven model does not conclusively show that Nucor is likely to beat the Zacks Consensus Estimate this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below:
Zacks ESP: Earnings ESP for Nucor for the fourth quarter is -4.93%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 55 cents and 58 cents, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Nucor currently carries a Zacks Rank #1, which when combined with a negative ESP, makes surprise prediction difficult.
Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Nucor Corporation Price and EPS Surprise
Nucor Corporation Price and EPS Surprise | Nucor Corporation Quote
Stocks Poised to Beat Estimates
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Agnico Eagle Mines Limited (AEM - Free Report) has an Earnings ESP of +20.99% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
LyondellBasell Industries N.V. (LYB - Free Report) has an Earnings ESP of +0.55% and carries a Zacks Rank #2.
Kinross Gold Corporation (KGC - Free Report) has an Earnings ESP of +2.27% and carries a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>