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Nucor (NUE) to Report Q4 Earnings: What's in the Cards?

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Nucor Corporation (NUE - Free Report) is set to release fourth-quarter 2018 results on Jan 29, before the opening bell.

In the last reported quarter, the steel giant reported negative earnings surprise of 0.9% by posting adjusted earnings of $2.33 per share. The figure missed the Zacks Consensus Estimate of $2.35.

Revenues went up roughly 30.4% year over year to $6,742.2 million and surpassed the Zacks Consensus Estimate of $6,518.5 million.

Notably, Nucor beat the Zacks Consensus Estimate for earnings in two of the trailing four quarters, delivering an average positive surprise of 5.6%.

The stock has lost 16.7% in the past year compared with the industry’s 30.8% decline.



Let’s see how things are shaping up for the upcoming announcement.

Earnings Whispers

Our proven model shows that Nucor is likely to beat estimates this quarter. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is the case here, as you will see below:

Earnings ESP: Earnings ESP for Nucor is +0.94%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are currently pegged at $1.95 and $1.93, respectively. 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 #3, which when combined with a positive ESP, makes us reasonably confident of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.  

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.

Factors at Play

In December 2018, Nucor issued guidance for fourth-quarter and 2018. The company expects earnings per share (EPS) in the range of $1.90-$1.95 for the fourth quarter. This reflects a decline from $2.13 in the third quarter but an increase from $1.20 in the year-ago quarter. The results in the year-ago quarter include a net benefit of $175.2 million or 55 cents per share associated with the impacts of U.S. federal tax legislation.

For 2018, Nucor expects record annual EPS in the range of $7.25-$7.30, marking an increase of roughly 22% from the earlier record earnings of $5.98 registered in 2008. Per the company, strong economic conditions in the United States resulting from regulatory and tax reforms supported earnings. Also, the company stated that the broad-based tariffs imposed under Section 232 is a major tailwind contributing to 2018 earnings.

Nucor continues to witness strong demand and higher average prices on a year-over-year basis across most products and expects the same to continue into 2019.  

The Zacks Consensus Estimate for fourth-quarter consolidated revenues for Nucor is currently pegged at $6,289 million, reflecting an expected year-over-year increase of around 23.5%.

Total steel mills shipments for the fourth quarter is expected to decline 5% sequentially, as the Zacks Consensus Estimate is currently pegged at 5,978,000 tons. Total tons shipped to outside customers are currently pegged at 6,580,000 tons, reflecting an expected decline of 6.6% sequentially.

Average sales price per ton for total steel mills is expected to dip 0.7% sequentially, as the Zacks Consensus Estimate is currently pegged at $870.

Nucor Corporation Price and EPS Surprise

 

Nucor Corporation Price and EPS Surprise | Nucor Corporation Quote

 

Other Stocks Poised to Beat Estimates

Here are some 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:

Teck Resources Ltd (TECK - Free Report) has an Earnings ESP of +7.03% and carries a Zacks Rank #2.

New Gold Inc. (NGD - Free Report) has an Earnings ESP of +166.67% and carries a Zacks Rank #2.

Franco-Nevada Corporation (FNV - Free Report) has an Earnings ESP of +3.05% and carries a Zacks Rank #2.

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