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Nucor (NUE) to Post Q1 Earnings: What's in the Cards?
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Nucor Corporation (NUE - Free Report) is set to release first-quarter 2017 results ahead of the bell on Apr 20.
In the last quarter, the U.S. steel giant delivered a positive earnings surprise of 47.06%, aided by gradual pickup of steel prices. The company recorded net profit of $159.6 million, or 50 cents per share in the previous quarter, compared with a loss of $187.5 million or 59 cents per share reported a year ago. The earnings reported in the previous quarter easily outstripped the Zacks Consensus Estimate of 34 cents.
Revenues increased around 14% year-over-year to $3,956 million in the previous quarter, comfortably beating the Zacks Consensus Estimate of $3,780 million.
Nucor beat the Zacks Consensus Estimate in two of the trailing four quarters, with an average beat of 7.65%.
Let’s see how things are shaping up for this announcement.
Nucor has provided an upbeat guidance for first-quarter 2017. The company expects earnings for the quarter to be in the band of $1.10 to $1.15 per share. This is a significant increase from 50 cents per share reported in the previous quarter and 27 cents a share in the year-ago quarter.
The company said that Nucor Steel Louisiana has resumed operations after an unexpected outage in early Feb 2017 owing to an equipment failure. However, management expects profitability of raw materials segment to improve in the first quarter compared to the previous quarter. This is because of improved performance of scrap processing segment and brokerage operations as well as in its direct reduced iron (“DRI”) facility in Trinidad.
Nucor expects the earnings to increase on a sequential comparison basis in the first quarter because of improved performance in the Steel Mills segment. The profitability of this segment is mainly driven by improved performance of the company’s plate mills and sheet. Nucor is witnessing renewed growth in demand, especially in the non-residential construction, energy markets and automotive market.
Nucor’s shares rallied around 20.8% over the past six months, outperforming the Zacks categorized Steel-Producers industry’s 13.5% gain.
Nucor has been focusing on inorganic growth through strategic acquisitions and it is well positioned to gain from such efforts to expand business through mergers and acquisitions. The acquisition of Gallatin Steel helped the company to improve foothold in the Midwest.
Moreover, the acquisition of Chicago-based Independence Tube Corporation allowed the company to expand product portfolio in terms of fabricator and service center customers and gain foothold in non-residential construction market. Recently, the company completed the purchase of the assets of Republic Conduit, steel electrical conduit maker, from Tenaris S.A. for around $335 million. The buyout is expected to make the Nucor a market leader in steel electrical conduits. The purchase of Southland Tube also strengthened Nucor’s foothold in the hollow structural section (“HSS”) steel tubing market.
Nucor is also seeing continued momentum in the automotive market. Demand in the automotive market remains healthy and may get better moving ahead, providing more strength to the company’s top line. The company has entered into a joint venture with JFE Steel Corporation of Japan to build and operate a plant in Mexico that will supply sheet steel to the country’s growing automotive market.
Earnings Whispers
Our proven model does not conclusively show that Nucor is likely to beat the Zacks Consensus Estimate this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below:
Zacks ESP: Earnings ESP for Nucor for the first quarter is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.13. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Nucor currently carries a Zacks Rank #2, which when combined with a 0.00% ESP, makes surprise prediction difficult.
Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some other companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
The Chemours Company (CC - Free Report) has an Earnings ESP of +4.08% and a Zacks Rank #1.
The Mosaic Company (MOS - Free Report) has an Earnings ESP of +10% and a Zacks Rank #2.
Franco-Nevada Corporation (FNV - Free Report) has an Earnings ESP of +15% and a Zacks Rank #3.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
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Nucor (NUE) to Post Q1 Earnings: What's in the Cards?
Nucor Corporation (NUE - Free Report) is set to release first-quarter 2017 results ahead of the bell on Apr 20.
In the last quarter, the U.S. steel giant delivered a positive earnings surprise of 47.06%, aided by gradual pickup of steel prices. The company recorded net profit of $159.6 million, or 50 cents per share in the previous quarter, compared with a loss of $187.5 million or 59 cents per share reported a year ago. The earnings reported in the previous quarter easily outstripped the Zacks Consensus Estimate of 34 cents.
Revenues increased around 14% year-over-year to $3,956 million in the previous quarter, comfortably beating the Zacks Consensus Estimate of $3,780 million.
Nucor beat the Zacks Consensus Estimate in two of the trailing four quarters, with an average beat of 7.65%.
Let’s see how things are shaping up for this announcement.
Nucor Corporation Price and EPS Surprise
Nucor Corporation Price and EPS Surprise | Nucor Corporation Quote
Factors at Play
Nucor has provided an upbeat guidance for first-quarter 2017. The company expects earnings for the quarter to be in the band of $1.10 to $1.15 per share. This is a significant increase from 50 cents per share reported in the previous quarter and 27 cents a share in the year-ago quarter.
The company said that Nucor Steel Louisiana has resumed operations after an unexpected outage in early Feb 2017 owing to an equipment failure. However, management expects profitability of raw materials segment to improve in the first quarter compared to the previous quarter. This is because of improved performance of scrap processing segment and brokerage operations as well as in its direct reduced iron (“DRI”) facility in Trinidad.
Nucor expects the earnings to increase on a sequential comparison basis in the first quarter because of improved performance in the Steel Mills segment. The profitability of this segment is mainly driven by improved performance of the company’s plate mills and sheet. Nucor is witnessing renewed growth in demand, especially in the non-residential construction, energy markets and automotive market.
Nucor’s shares rallied around 20.8% over the past six months, outperforming the Zacks categorized Steel-Producers industry’s 13.5% gain.
Nucor has been focusing on inorganic growth through strategic acquisitions and it is well positioned to gain from such efforts to expand business through mergers and acquisitions. The acquisition of Gallatin Steel helped the company to improve foothold in the Midwest.
Moreover, the acquisition of Chicago-based Independence Tube Corporation allowed the company to expand product portfolio in terms of fabricator and service center customers and gain foothold in non-residential construction market. Recently, the company completed the purchase of the assets of Republic Conduit, steel electrical conduit maker, from Tenaris S.A. for around $335 million. The buyout is expected to make the Nucor a market leader in steel electrical conduits. The purchase of Southland Tube also strengthened Nucor’s foothold in the hollow structural section (“HSS”) steel tubing market.
Nucor is also seeing continued momentum in the automotive market. Demand in the automotive market remains healthy and may get better moving ahead, providing more strength to the company’s top line. The company has entered into a joint venture with JFE Steel Corporation of Japan to build and operate a plant in Mexico that will supply sheet steel to the country’s growing automotive market.
Earnings Whispers
Our proven model does not conclusively show that Nucor is likely to beat the Zacks Consensus Estimate this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below:
Zacks ESP: Earnings ESP for Nucor for the first quarter is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.13. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Nucor currently carries a Zacks Rank #2, which when combined with a 0.00% ESP, makes surprise prediction difficult.
Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some other companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
The Chemours Company (CC - Free Report) has an Earnings ESP of +4.08% and a Zacks Rank #1.
The Mosaic Company (MOS - Free Report) has an Earnings ESP of +10% and a Zacks Rank #2.
Franco-Nevada Corporation (FNV - Free Report) has an Earnings ESP of +15% and a Zacks Rank #3.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
See today's Zacks "Strong Sells" absolutely free >>.