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Nucor (NUE) Invests $280M to Modernize Alabama Steel Plate Mill

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Nucor Corporation (NUE - Free Report) has announced a significant investment of $280 million for the modernization of its steel plate mill located in Tuscaloosa, AL. The approval of this investment from the company's Board of Directors underscores Nucor's commitment to enhancing the capabilities of Nucor Steel Tuscaloosa and strategically serving key market segments integral to the Plate Mill Group's overarching strategy.

Nucor highlighted its dedication to investing in its workforce and facilities to deliver value to customers. The modernization project is expected to reinforce the plate group's standing as a leader with the most diverse and comprehensive product mix in the industry.

Acknowledging the commendable efforts of the Plate Mill Group team in executing strategic shifts and improving the profitability of plate mills, Nucor emphasized the importance of the Tuscaloosa rolling mill's modernization. This substantial investment aims to maintain competitiveness in the global steel industry while creating new market opportunities for the team. It expressed gratitude for the support received from the Tuscaloosa County Economic Development Authority for the project.

Nucor's Plate Mill Group, consisting of three production facilities in Hertford County, NC; Brandenburg, KY; and Tuscaloosa, AL, boasts an annual capacity of approximately 3 million tons of cut-to-length and discrete plate. The company's plate production serves various industries, including military applications and the manufacturing of barges, bridges, heavy equipment, rail cars, refinery tanks, ships, wind towers and other items crucial to the pipe and tube, pressure vessel, transportation and construction sectors.

Nucor’s shares have gained 3% in the past year compared with the industry's 14% rise in the same period.

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In the third quarter of 2023, Nucor reported earnings of $4.57 per share, down from $6.50 in the year-ago quarter. Despite the downside, the earnings per share exceeded the Zacks Consensus Estimate of $4.26. Net sales in the quarter totaled $8,775.7 million, down approximately 16% year over year and surpassing the Zacks Consensus Estimate of $8,532.3 million.

Looking ahead to the fourth quarter of 2023, Nucor anticipates a sequential decline in earnings. The downtick was caused by lower pricing across all three operating segments, with sheet mills in the steel mills segment expected to experience the most significant decline in realized pricing. Additionally, lower average selling prices and volume levels in the steel products segment, along with decreased earnings in the raw materials segment due to lower raw material prices and planned shutdowns at the DRI facilities, contribute to the overall outlook for reduced earnings in the fourth quarter.

Nucor Corporation Price and Consensus

 

Nucor Corporation Price and Consensus

Nucor Corporation price-consensus-chart | Nucor Corporation Quote

 

Zacks Rank & Key Picks

Nucor currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Basic Materials space are Axalta Coating Systems Ltd. (AXTA - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and The Andersons Inc. (ANDE - Free Report) and Alamos Gold Inc. (AGI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for AXTA’s current fiscal year earnings is pegged at $1.58, indicating year-over-year growth of 6.8%. AXTA beat the Zacks Consensus Estimate in three of the last four quarters and missed one, with the average earnings surprise being 6.7%. The company’s shares have surged 17.7% in the past year.

The Zacks Consensus Estimate for ANDE’s current-year earnings has been revised 8.6% upward in the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 32.8% on average. ANDE’s shares have rallied around 35.3% in a year.

The consensus estimate for Alamos’ current fiscal year earnings is pegged at 52 cents, indicating year-over-year growth of 85.7%. AGI beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 25.6%. The company’s shares have increased 36.7% in the past year.

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