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Why Is Nucor (NUE) Up 7.2% Since Last Earnings Report?
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It has been about a month since the last earnings report for Nucor (NUE - Free Report) . Shares have added about 7.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Nucor due for a pullback? 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 Q3 Earnings and Sales Surpass Estimates
Nucor reported earnings of $4.57 per share for third-quarter 2023, down from earnings of $6.50 per share in the year-ago quarter. Earnings per share topped the Zacks Consensus Estimate of $4.26.
The company recorded net sales of around $8.78 billion, down around 16% year over year. The figure topped the Zacks Consensus Estimate of $8.53 billion.
Earnings declined in the third quarter primarily due to lower prices and decreased volumes.
Operating Figures
Total sales tons to outside customers for steel mills in the third quarter were 4,578,000 tons, a 1% increase year over year. It fell short of our estimate of 4,705,000 tons.
The average sales price for steel mills was $1,114 per ton, which fell 14% year over year and was down around 3% sequentially. It was ahead of our estimate of $1,038 per ton.
Overall operating rates at the company's steel mills fell to 77% in the third quarter of 2023 compared with 84% in the second quarter of 2023. It also compares to 77% in the third quarter of 2022.
Segment Highlights
Earnings of the company’s steel mills unit fell 37% sequentially in the reported quarter on lower pricing and reduced metal margins.
Earnings in the steel products division were lower by 20% sequentially in the third quarter due to reduced prices and modestly lower shipments.
The raw materials segment’s earnings were down 49% sequentially on reduced prices and shipments.
Financial Position
Cash and cash equivalents were $5.86 billion at the end of the quarter, up 71% year over year. Long-term debt was $6.62 billion, flat year over year.
The company repurchased nearly 3 million shares of its common stock at an average price of $168.99 per share during the quarter.
Outlook
For the fourth quarter of 2023, the company foresees a sequential decline in earnings mainly attributed to lower pricing across all three operating segments, with a lesser impact from decreased volumes.
In the steel mills segment, the most pronounced decline in realized pricing is expected to take place at sheet mills. Within the steel products segment, earnings are projected to fall due to the moderation of average selling prices across most product groups in this segment and lower volume levels.
Moreover, earnings for the raw materials segment are expected to decrease in the fourth quarter of 2023 in contrast to the third quarter of 2023, mainly due to lower raw material prices and planned shutdowns at the direct-reduced iron (DRI) facilities.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Nucor has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Nucor has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Nucor is part of the Zacks Steel - Producers industry. Over the past month, Steel Dynamics (STLD - Free Report) , a stock from the same industry, has gained 10.9%. The company reported its results for the quarter ended September 2023 more than a month ago.
Steel Dynamics reported revenues of $4.59 billion in the last reported quarter, representing a year-over-year change of -18.8%. EPS of $3.47 for the same period compares with $5.46 a year ago.
For the current quarter, Steel Dynamics is expected to post earnings of $2.44 per share, indicating a change of -44.2% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.8% over the last 30 days.
Steel Dynamics has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Why Is Nucor (NUE) Up 7.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Nucor (NUE - Free Report) . Shares have added about 7.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Nucor due for a pullback? 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 Q3 Earnings and Sales Surpass Estimates
Nucor reported earnings of $4.57 per share for third-quarter 2023, down from earnings of $6.50 per share in the year-ago quarter. Earnings per share topped the Zacks Consensus Estimate of $4.26.
The company recorded net sales of around $8.78 billion, down around 16% year over year. The figure topped the Zacks Consensus Estimate of $8.53 billion.
Earnings declined in the third quarter primarily due to lower prices and decreased volumes.
Operating Figures
Total sales tons to outside customers for steel mills in the third quarter were 4,578,000 tons, a 1% increase year over year. It fell short of our estimate of 4,705,000 tons.
The average sales price for steel mills was $1,114 per ton, which fell 14% year over year and was down around 3% sequentially. It was ahead of our estimate of $1,038 per ton.
Overall operating rates at the company's steel mills fell to 77% in the third quarter of 2023 compared with 84% in the second quarter of 2023. It also compares to 77% in the third quarter of 2022.
Segment Highlights
Earnings of the company’s steel mills unit fell 37% sequentially in the reported quarter on lower pricing and reduced metal margins.
Earnings in the steel products division were lower by 20% sequentially in the third quarter due to reduced prices and modestly lower shipments.
The raw materials segment’s earnings were down 49% sequentially on reduced prices and shipments.
Financial Position
Cash and cash equivalents were $5.86 billion at the end of the quarter, up 71% year over year. Long-term debt was $6.62 billion, flat year over year.
The company repurchased nearly 3 million shares of its common stock at an average price of $168.99 per share during the quarter.
Outlook
For the fourth quarter of 2023, the company foresees a sequential decline in earnings mainly attributed to lower pricing across all three operating segments, with a lesser impact from decreased volumes.
In the steel mills segment, the most pronounced decline in realized pricing is expected to take place at sheet mills. Within the steel products segment, earnings are projected to fall due to the moderation of average selling prices across most product groups in this segment and lower volume levels.
Moreover, earnings for the raw materials segment are expected to decrease in the fourth quarter of 2023 in contrast to the third quarter of 2023, mainly due to lower raw material prices and planned shutdowns at the direct-reduced iron (DRI) facilities.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Nucor has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Nucor has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Nucor is part of the Zacks Steel - Producers industry. Over the past month, Steel Dynamics (STLD - Free Report) , a stock from the same industry, has gained 10.9%. The company reported its results for the quarter ended September 2023 more than a month ago.
Steel Dynamics reported revenues of $4.59 billion in the last reported quarter, representing a year-over-year change of -18.8%. EPS of $3.47 for the same period compares with $5.46 a year ago.
For the current quarter, Steel Dynamics is expected to post earnings of $2.44 per share, indicating a change of -44.2% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.8% over the last 30 days.
Steel Dynamics has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.