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National Steel (SID) Shares Dip as Q4 Earnings Miss Estimates

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Shares of National Steel (SID - Free Report) fell 3% since it reported fourth-quarter 2024 results on Mar 6, delivering earnings per share (EPS) of 13 cents, which missed the Zacks Consensus Estimate of 19 cents. It reported an EPS of 3 cents in the prior-year quarter.

Domestic revenues decreased 7.3% year over year to R$5.48 billion ($1.1 billion). The company’s international business revenues improved 25.1% year over year to R$6.52 billion ($1.31 billion).

For the December 2023-end quarter, net revenues were R$12 billion ($2.42 billion), up 7.9% year over year. The company reported a net income of R$851 million ($171 million) in the fourth quarter of 2023, which marked a 332% improvement year-over-year.

National Steel Company Price, Consensus and EPS Surprise

 

National Steel Company Price, Consensus and EPS Surprise

National Steel Company price-consensus-eps-surprise-chart | National Steel Company Quote

Segmental Performance

Steel: The segment’s revenues totaled R$5.65 billion ($1.14 billion), down 6.6% year over year. Steel sales were 1,064 thousand tons, up 5.6% from 1,008 thousand tons in the fourth quarter of 2022. Iron ore sales were 11,144 thousand tons, marking a 15% rise from the prior-year quarter.

Mining: The segment generated revenues of R$5.03 billion ($1.01 billion), up 42.5% year over year.

Logistics (Port and Railways): Revenues came in at R$795 million ($160 million), up 14.6% year over year.

Energy: The segment’s revenues totaled R$125 million ($25 million), which marked an 18.8% year-over-year fall.

Cement: The segment’s revenues declined 7.7% year over year to R$1.1 billion ($0.22 billion).

Margin & Costs

In the fourth quarter of 2023, the company’s cost of sales increased 6% year-over-year to R$8.34 billion ($1.68 billion). Gross profit declined 11.8% year over year to R$3.67 billion ($0.74 billion). The gross margin came in at 30.6% compared with the year-earlier quarter’s 29.5%.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) improved 16.1% year over year to R$3.63 billion ($0.73 billion). The EBITDA margin was 30.2% in the reported quarter compared with the prior-year quarter’s 28.1%.

2023 Results

The company delivered a net income of R$0.40 billion ($0.08 billion) in 2023 compared with R$2.17 billion ($0.44 billion) in 2022. It reported sales of R$45.43 billion ($9.14 billion), up 2.4% year over year.

The company delivered EPS of 6 cents, which missed the Zacks Consensus Estimate of 29 cents. It reported an EPS of 32 cents in the prior-year.

Balance Sheet & Cash Flow

The company had cash and cash equivalents of R$16.05 billion ($3.23 billion) at the end of 2023, up from R$11.99 billion ($2.41 billion) at the end of 2022. The net debt to adjusted EBITDA ratio was 2.58 at the fourth-quarter 2023 end compared with the prior-year quarter’s 2.21.

Price Performance

National Steel’s shares have gained 26.5% in the past year compared with the industry’s 22.9% growth.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Zacks Rank & Stocks to Consider

National Steel currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the basic materials space are Ecolab Inc. (ECL - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Hawkins, Inc. (HWKN - Free Report) . ECL and CRS sport a Zacks Rank #1 (Strong Buy) at present, and HWKN has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Ecolab’s 2024 earnings is pegged at $6.39 per share, indicating an increase of 22.7% from the prior year’s reported number. It has an average trailing four-quarter earnings surprise of 1.7%. ECL shares have gained 41.8% in a year.

The Zacks Consensus Estimate for Carpenter Technology’s 2024 earnings is pegged at $4 per share. The consensus estimate for 2024 earnings has moved 1% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 14.3%. CRS shares have gained 33.5% in a year.

The Zacks Consensus Estimate for Hawkins’ 2024 earnings is pegged at $3.61 per share, indicating a year-over-year rise of 26.2%. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised 4.3% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 30.6%. The company’s shares have rallied 70% in the past year.

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