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Nucor's (NUE) Q3 Earnings Beat Estimates, Revenues Miss
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Nucor Corporation (NUE - Free Report) saw its profits (on a reported basis) decline year over year in the third-quarter 2017, but its earnings beat expectations.
The steel giant logged a profit of $268.5 million or 83 cents per share for the third quarter, compared to earnings of $305.4 million or 95 cents per share it registered a year ago. Earnings include a one-time gain of $13.2 million or 4 cents. Barring one-time items, earnings per share for the reported quarter were 79 cents, which surpassed the Zacks Consensus Estimate of 78 cents.
Revenues increased roughly 20.5% year over year to $5,170.1 million in the reported quarter from $4,290.2 million, but missed the Zacks Consensus Estimate of $5,276 million.
Nucor Corporation Price, Consensus and EPS Surprise
Total steel mills shipments in the third quarter were 6,165,000 tons, up 18% year over year. Total tons shipped to outside customers were up 12% year over year to 6,618,000 tons. Average sales price in the quarter were up 7% year over year.
Steel mill operating rates decreased to 83% in the reported quarter from 88% a year ago.
Segment Highlights
Nucor witnessed decreased profitability in its Steel Mills segment in the third quarter compared with the previous quarter. According to the company, higher utilization rates at its sheet mills unit were offset by continued pressure from imports, which prevented prices from maintaining pace with rising cost of raw materials. The performance of plate mills also decreased considerably on a sequential basis.
The performance of Nucor’s Raw Materials segment in the third quarter decreased compared with the second due to due to unplanned outages in its Louisiana plant during most of the quarter.
Nucor also witnessed improved profitability in its downstream products segment on a sequential comparison basis in the third quarter on the back of higher selling price and volumes.
Financial Position
Nucor ended the quarter with cash and cash equivalents of around $1,575.9million, down roughly 7.6% from $1,704.7 million a year ago. Long-term debt was $3,241.5 million, down around 25.3% year over year from $4,338.3 million.
Outlook
According to Nucor, the company expects generally stable and improving market conditions for automotive, energy, nonresidential construction, agriculture and heavy equipment. It is also encouraged by the cumulative benefits resulting from successful trade cases of the domestic steel industry. The company expects earnings in fourth-quarter 2017 to be to be similar to slightly lower from the third quarter, excluding tax benefits recognized during the third quarter of 2017.
Nucor expects improved performance from the raw materials unit on the back of more consistent DRI production. Its downstream steel products unit is also expected to benefit from margin improvement whereas the steel mills unitis expected to witness some decline mainly due to weakness in plate steel and typical seasonality.
Price Performance
Shares of Nucor have moved up 18.5% in the last year, underperforming the industry’s 27.9% growth.
Zacks Rank & Stocks to Consider
Nucor currently carries a Zacks Rank #5 (Strong Sell).
Huntsman has an expected long-term earnings growth rate of 7%.
Air Products has an expected long-term earnings growth rate of 12.1%.
FMC has an expected long-term earnings growth rate of 11.3%.
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It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Nucor's (NUE) Q3 Earnings Beat Estimates, Revenues Miss
Nucor Corporation (NUE - Free Report) saw its profits (on a reported basis) decline year over year in the third-quarter 2017, but its earnings beat expectations.
The steel giant logged a profit of $268.5 million or 83 cents per share for the third quarter, compared to earnings of $305.4 million or 95 cents per share it registered a year ago. Earnings include a one-time gain of $13.2 million or 4 cents. Barring one-time items, earnings per share for the reported quarter were 79 cents, which surpassed the Zacks Consensus Estimate of 78 cents.
Revenues increased roughly 20.5% year over year to $5,170.1 million in the reported quarter from $4,290.2 million, but missed the Zacks Consensus Estimate of $5,276 million.
Nucor Corporation Price, Consensus and EPS Surprise
Nucor Corporation Price, Consensus and EPS Surprise | Nucor Corporation Quote
Operating Stats
Total steel mills shipments in the third quarter were 6,165,000 tons, up 18% year over year. Total tons shipped to outside customers were up 12% year over year to 6,618,000 tons. Average sales price in the quarter were up 7% year over year.
Steel mill operating rates decreased to 83% in the reported quarter from 88% a year ago.
Segment Highlights
Nucor witnessed decreased profitability in its Steel Mills segment in the third quarter compared with the previous quarter. According to the company, higher utilization rates at its sheet mills unit were offset by continued pressure from imports, which prevented prices from maintaining pace with rising cost of raw materials. The performance of plate mills also decreased considerably on a sequential basis.
The performance of Nucor’s Raw Materials segment in the third quarter decreased compared with the second due to due to unplanned outages in its Louisiana plant during most of the quarter.
Nucor also witnessed improved profitability in its downstream products segment on a sequential comparison basis in the third quarter on the back of higher selling price and volumes.
Financial Position
Nucor ended the quarter with cash and cash equivalents of around $1,575.9million, down roughly 7.6% from $1,704.7 million a year ago. Long-term debt was $3,241.5 million, down around 25.3% year over year from $4,338.3 million.
Outlook
According to Nucor, the company expects generally stable and improving market conditions for automotive, energy, nonresidential construction, agriculture and heavy equipment. It is also encouraged by the cumulative benefits resulting from successful trade cases of the domestic steel industry. The company expects earnings in fourth-quarter 2017 to be to be similar to slightly lower from the third quarter, excluding tax benefits recognized during the third quarter of 2017.
Nucor expects improved performance from the raw materials unit on the back of more consistent DRI production. Its downstream steel products unit is also expected to benefit from margin improvement whereas the steel mills unitis expected to witness some decline mainly due to weakness in plate steel and typical seasonality.
Price Performance
Shares of Nucor have moved up 18.5% in the last year, underperforming the industry’s 27.9% growth.
Zacks Rank & Stocks to Consider
Nucor currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the basic materials space are Huntsman Corp. (HUN - Free Report) , Air Products and Chemicals, Inc. (APD - Free Report) and FMC Corp. (FMC - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Huntsman has an expected long-term earnings growth rate of 7%.
Air Products has an expected long-term earnings growth rate of 12.1%.
FMC has an expected long-term earnings growth rate of 11.3%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>