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Nucor (NUE) Scoops Up Republic Conduit for $335 Million
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Nucor (NUE - Free Report) has agreed to buy steel electrical conduit maker, Republic Conduit, from Luxembourg-based Tenaris S.A. for $335 million. Republic Conduit is a leading producer of steel electrical conduit in North America.
Republic Conduit makes electrogalvanized electrical metallic tubing and intermediate metal conduit, and hot-dip galvanized electrical rigid metal conduit. It employs around 300 people at two non-unionized facilities located in Louisville, KY, and Cedar Springs, GA.
The company’s products are mainly used to protect and route electrical wiring in a range of non-residential structures including hospitals, schools, office buildings and hotels. Republic Conduit also caters to the power and industrial sectors. Its annual shipment volumes averaged around 146,000 tons over the last two years.
The acquisition, when complete, will make Nucor the market leader in steel conduits. The buyout also complements Nucor’s recent expansion of foothold in the pipe and tube market. It also provides the company a new range of value-added products.
Nucor has been on an acquisition spree of late. The company, earlier this month, agreed to buy an independent producer of hollow structural section steel tubing, Southland Tube, for $130 million. The company, in early November, also completed its $435 million acquisition of Independence Tube, which has the second-largest market share in the hollow structural section space.
Nucor has underperformed the Zacks categorized Steel-Producers industry over the past three months, partly attributable to its lower-than-expected results in third-quarter 2016. The company’s shares have gained around 31.1% over this period, compared with roughly 35.8% gain recorded by the industry.
Nucor’s adjusted earnings of 88 cents per share for the third quarter missed the Zacks Consensus Estimate of 90 cents. Moreover, revenues of $4,290.2 million trailed the Zacks Consensus Estimate of $4,539 million.
Nucor recently provided downbeat guidance for fourth-quarter 2016. The company sees earnings for the quarter to be in the band of 30 cents to 35 cents per share. That is a decrease from 84 cents per share recorded in the previous quarter and 45 cents a share it earned a year ago.
Nucor said that the expected decline in fourth-quarter earnings on a sequential comparison basis mainly reflects lower margins in the steel mills segment, with the most significant impact at its sheet mills.
Some better-ranked companies in the steel space include POSCO (PKX - Free Report) , AK Steel Holding Corporation and Schnitzer Steel Industries, Inc. .
AK Steel has an expected earnings growth of around 208.8% for the current year. The stock carries a Zacks Rank #2 (Buy).
Schnitzer Steel carries a Zacks Rank #2 and has an expected earnings growth of around 84.1% for the current year.
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Nucor (NUE) Scoops Up Republic Conduit for $335 Million
Nucor (NUE - Free Report) has agreed to buy steel electrical conduit maker, Republic Conduit, from Luxembourg-based Tenaris S.A. for $335 million. Republic Conduit is a leading producer of steel electrical conduit in North America.
Republic Conduit makes electrogalvanized electrical metallic tubing and intermediate metal conduit, and hot-dip galvanized electrical rigid metal conduit. It employs around 300 people at two non-unionized facilities located in Louisville, KY, and Cedar Springs, GA.
The company’s products are mainly used to protect and route electrical wiring in a range of non-residential structures including hospitals, schools, office buildings and hotels. Republic Conduit also caters to the power and industrial sectors. Its annual shipment volumes averaged around 146,000 tons over the last two years.
The acquisition, when complete, will make Nucor the market leader in steel conduits. The buyout also complements Nucor’s recent expansion of foothold in the pipe and tube market. It also provides the company a new range of value-added products.
Nucor has been on an acquisition spree of late. The company, earlier this month, agreed to buy an independent producer of hollow structural section steel tubing, Southland Tube, for $130 million. The company, in early November, also completed its $435 million acquisition of Independence Tube, which has the second-largest market share in the hollow structural section space.
Nucor has underperformed the Zacks categorized Steel-Producers industry over the past three months, partly attributable to its lower-than-expected results in third-quarter 2016. The company’s shares have gained around 31.1% over this period, compared with roughly 35.8% gain recorded by the industry.
Nucor’s adjusted earnings of 88 cents per share for the third quarter missed the Zacks Consensus Estimate of 90 cents. Moreover, revenues of $4,290.2 million trailed the Zacks Consensus Estimate of $4,539 million.
Nucor recently provided downbeat guidance for fourth-quarter 2016. The company sees earnings for the quarter to be in the band of 30 cents to 35 cents per share. That is a decrease from 84 cents per share recorded in the previous quarter and 45 cents a share it earned a year ago.
Nucor said that the expected decline in fourth-quarter earnings on a sequential comparison basis mainly reflects lower margins in the steel mills segment, with the most significant impact at its sheet mills.
Nucor currently carries a Zacks Rank #3 (Hold).
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Other Stocks to Consider
Some better-ranked companies in the steel space include POSCO (PKX - Free Report) , AK Steel Holding Corporation and Schnitzer Steel Industries, Inc. .
POSCO sports a Zacks Rank #1 (Strong Buy). The company has an expected earnings growth of around 857.1% for the current year. You can see the complete list of today’s Zacks #1 Rank stocks here.
AK Steel has an expected earnings growth of around 208.8% for the current year. The stock carries a Zacks Rank #2 (Buy).
Schnitzer Steel carries a Zacks Rank #2 and has an expected earnings growth of around 84.1% for the current year.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>