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Gerdau (GGB) to Post Q4 Earnings: What's in the Cards?

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Gerdau S.A. (GGB - Free Report) will release fourth-quarter 2021 results before the opening bell on Feb 23.

The company has a trailing four-quarter earnings surprise of roughly 21.9%, on average. It posted an earnings surprise of 63.2% in the last reported quarter. The company’s fourth-quarter results are likely to reflect strong demand from construction and industrial sectors and higher steel prices.

Shares of Gerdau have gained 5.3% in the past year compared with 26.9% rise of the industry.

 

Zacks Investment Research
Image Source: Zacks Investment Research



Let’s see how things are shaping up for this announcement.

What do the Estimates Say?

The Zacks Consensus Estimate for fourth-quarter sales for Gerdau is currently pegged at $3,966 million, which suggests a rise of around 57.1% year over year.

Some Factors at Play

Gerdau is likely to have benefited, in the fourth quarter, from strong demand for steel in its key operations. A recovery in major consumer sectors across its operations is likely to have supported its steel shipments in the December quarter.

The strong performance of the construction industry in Brazil and the United States along with higher global steel prices are also likely to have driven the company’s margins in the quarter to be reported. It is seeing higher production and shipments in its Brazil and North America business divisions on higher demand from the construction and industrial sectors. A rebound in light vehicle production in Brazil and the United States, healthy performance of the heavy vehicle sector in Brazil and the demand recovery in the oil and gas industry are also expected to have supported volumes in its Special Steel division in the fourth quarter. However, higher costs of key raw materials such as scrap and iron ore are likely to have weighed on its performance.

 

Gerdau S.A. Price and EPS Surprise

 

Gerdau S.A. Price and EPS Surprise

Gerdau S.A. price-eps-surprise | Gerdau S.A. Quote

 

Zacks Model

Our proven model does not conclusively predict an earnings beat for Gerdau this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Gerdau is -7.50%. The Zacks Consensus Estimate for earnings for the fourth quarter is currently pegged at 40 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Gerdau currently carries a Zacks Rank #2.

Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:

Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) , scheduled to release earnings on Mar 2, has an Earnings ESP of +15.68% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Sociedad Quimica’s fourth-quarter earnings has been revised 12.8% upward over the past 30 days. The consensus estimate for SQM’s earnings for the quarter stands at 97 cents.

Newmont Corporation (NEM - Free Report) , scheduled to release earnings on Feb 24, has an Earnings ESP of +3.59% and carries a Zacks Rank #3.

The consensus estimate for Newmont’s fourth-quarter earnings has been revised 1.3% upward over the past 30 days. The Zacks Consensus Estimate for NEM’s earnings for the quarter stands at 76 cents.

MP Materials Corp. (MP - Free Report) , slated to release earnings on Feb 24, has an Earnings ESP of +21.88% and carries a Zacks Rank #1.
 
The consensus estimate for MP Materials’ fourth-quarter earnings has been stable in the past 30 days. The Zacks Consensus Estimate for MP’s quarterly earnings is pinned at 21 cents.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.