Nucor Corporation’s (NUE - Free Report) profits declined year over year in first-quarter 2020. The steel giant logged net earnings of $20.3 million or 7 cents per share, down from $501.8 million or $1.63 in the year-ago quarter.
Barring one-time items, adjusted earnings per share came in at 99 cents that topped the Zacks Consensus Estimate of 98 cents.
Nucor recorded net sales of $5,624.3 million, down 7.7% year over year. The figure beat the Zacks Consensus Estimate of $5,320.5 million.
Operating Figures
Total steel mills shipments in the first quarter were 6,498,000 tons, up 8% year over year. Total tons shipped to outside customers were up 6% year over year to 7,187,000 tons. Average sales price declined 13% year over year.
Steel mill operating rates were 89% in the first quarter compared with 87% in the prior-year quarter.
Segment Highlights
Barring impairment charges, profitability in the steel mills segment increased sequentially in the first quarter due to higher volumes and selling prices at Nucor’s sheet and bar mills.
The performance of steel products unit improved in the quarter compared with fourth-quarter levels. The upside can be attributed to higher volumes.
Profitability in the raw materials division rose sequentially owing to improvement in raw materials pricing as well as improved performance at Nucor’s DRI facilities and the absence of the impairment charge.
Financial Position
Nucor ended the first quarter with cash and cash equivalents of around $1.25 billion, down around 20% year over year. Long-term debt was $4,243.2 million, up 0.2% year over year.
Net cash generated from operating activities declined 69.1% year over year to $201 million.
Currently, the company’s credit ratings are unchanged at Baa1/A- with stable outlooks at both Moody's and Standard & Poor's. Nucor also paid and increased its regular dividend for 47 consecutive years and expects to continue this practice.
The company repurchased around 0.8 million shares of its common stock during the first quarter. As of Apr 4, the company had around 301,135,000 shares outstanding and nearly $1.16 billion remaining for repurchases under its authorized share repurchase program.
Outlook
Nucor stated that the impact of the coronavirus pandemic has been varied across its different product groups. While the energy and automotive markets witnessed the steepest decline, non-residential construction has been resilient through challenging times.
The company anticipates to report a loss in second-quarter 2020. Moreover, the duration of the coronavirus-induced downturn is difficult to predict at the moment and economic outlook remains uncertain, the company noted. Nucor believes that market conditions will bottom out in the second quarter and it will return to profitability in the second half of 2020.
Price Performance
Shares of Nucor have lost 28.8% in the past year compared with the industry’s 43.9% decline.
Zacks Rank & Key Picks
Nucor currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the basic materials space are Newmont Corporation (NEM - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and Franco-Nevada Corporation (FNV - Free Report) . While Newmont and Barrick sport a Zacks Rank #1 (Strong Buy), Franco-Nevada carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Newmont has an expected earnings growth rate of 90.2% for 2020. The company’s shares have surged 103.6% in the past year.
Barrick has an expected earnings growth rate of 60.8% for 2020. Its shares have returned 112.7% in the past year.
Franco-Nevada has an expected earnings growth rate of 19.2% for 2020. The company’s shares have surged 92.5% in the past year.
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Nucor Corporation’s (NUE - Free Report) profits declined year over year in first-quarter 2020. The steel giant logged net earnings of $20.3 million or 7 cents per share, down from $501.8 million or $1.63 in the year-ago quarter.
Barring one-time items, adjusted earnings per share came in at 99 cents that topped the Zacks Consensus Estimate of 98 cents.
Nucor recorded net sales of $5,624.3 million, down 7.7% year over year. The figure beat the Zacks Consensus Estimate of $5,320.5 million.
Operating Figures
Total steel mills shipments in the first quarter were 6,498,000 tons, up 8% year over year. Total tons shipped to outside customers were up 6% year over year to 7,187,000 tons. Average sales price declined 13% year over year.
Steel mill operating rates were 89% in the first quarter compared with 87% in the prior-year quarter.
Segment Highlights
Barring impairment charges, profitability in the steel mills segment increased sequentially in the first quarter due to higher volumes and selling prices at Nucor’s sheet and bar mills.
The performance of steel products unit improved in the quarter compared with fourth-quarter levels. The upside can be attributed to higher volumes.
Profitability in the raw materials division rose sequentially owing to improvement in raw materials pricing as well as improved performance at Nucor’s DRI facilities and the absence of the impairment charge.
Financial Position
Nucor ended the first quarter with cash and cash equivalents of around $1.25 billion, down around 20% year over year. Long-term debt was $4,243.2 million, up 0.2% year over year.
Net cash generated from operating activities declined 69.1% year over year to $201 million.
Currently, the company’s credit ratings are unchanged at Baa1/A- with stable outlooks at both Moody's and Standard & Poor's. Nucor also paid and increased its regular dividend for 47 consecutive years and expects to continue this practice.
The company repurchased around 0.8 million shares of its common stock during the first quarter. As of Apr 4, the company had around 301,135,000 shares outstanding and nearly $1.16 billion remaining for repurchases under its authorized share repurchase program.
Outlook
Nucor stated that the impact of the coronavirus pandemic has been varied across its different product groups. While the energy and automotive markets witnessed the steepest decline, non-residential construction has been resilient through challenging times.
The company anticipates to report a loss in second-quarter 2020. Moreover, the duration of the coronavirus-induced downturn is difficult to predict at the moment and economic outlook remains uncertain, the company noted. Nucor believes that market conditions will bottom out in the second quarter and it will return to profitability in the second half of 2020.
Price Performance
Shares of Nucor have lost 28.8% in the past year compared with the industry’s 43.9% decline.
Zacks Rank & Key Picks
Nucor currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the basic materials space are Newmont Corporation (NEM - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and Franco-Nevada Corporation (FNV - Free Report) . While Newmont and Barrick sport a Zacks Rank #1 (Strong Buy), Franco-Nevada carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Newmont has an expected earnings growth rate of 90.2% for 2020. The company’s shares have surged 103.6% in the past year.
Barrick has an expected earnings growth rate of 60.8% for 2020. Its shares have returned 112.7% in the past year.
Franco-Nevada has an expected earnings growth rate of 19.2% for 2020. The company’s shares have surged 92.5% in the past year.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 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 >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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