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Nucor's (NUE) Earnings, Revenues Trounce Estimates in Q4

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Nucor Corporation (NUE - Free Report) saw its profits jump in fourth-quarter 2018 on the back of higher year-over-year steel prices and shipments. The steel giant logged net earnings of $646.8 million or $2.07 per share, up roughly 68% from $383.9 million or $1.20 registered a year ago. Earnings per share also topped the Zacks Consensus Estimate of $1.93.

Nucor raked in net sales of $6,295.9 million for the reported quarter, up roughly 24% year over year. The figure also outpaced the Zacks Consensus Estimate of $6,289.3 million.

Nucor Corporation Price, Consensus and EPS Surprise

 

Nucor Corporation Price, Consensus and EPS Surprise | Nucor Corporation Quote

 

FY18 Results

For 2018, net earnings were $2.36 billion or $7.42 per share, up around 79% from $1.32 billion or $4.10 per share recorded in 2017.

Net sales for the year jumped 24% year over year to roughly $25.1 billion.
 
Operating Stats

Total steel mills shipments in the quarter were 5,888,000 tons, up 2% year over year. Total tons shipped to outside customers were up 2% year over year to 6,687,000 tons. Average sales price improved 21% year over year.

Steel mill operating rates increased to 88% in the fourth quarter from 82% a year ago.

Segment Highlights

Profitability in the company’s steel mills segment decreased sequentially in the fourth quarter, affected by lower shipments and reduced average selling prices at sheet, bar and structural mills.

Performance of steel products unit also decreased sequentially due to decline in the company’s tubular products group and rebar fabrication businesses. Moreover, performance of the raw materials segment declined on a sequential comparison basis due to lower earnings of Nucor’s DRI businesses.

Financial Position

Nucor ended 2018 with cash and cash equivalents of roughly $1.4 billion, up around 47% year over year. Long-term debt was $4,233.3 million, up roughly 31% year over year.

The company repurchased around 8.4 million shares during the fourth quarter.

Outlook

Moving ahead, Nucor expects 2019 to be another strong year. The company has a favorable outlook on end-use demand and general economic conditions.

Nucor envisions strong earnings performance in the first quarter of 2019. The company expects higher profitability of its bar mills and structural mills to partly offset declines in sheet pricing and margins in the quarter on a sequential comparison basis.

The company expects performance of the raw materials segment to decrease in the first quarter sequentially due to lower performance of DRI businesses. Profitability of steel products segment is forecast to be similar to fourth-quarter 2018.

Price Performance

Shares of Nucor have lost 15.3% in the past year, against the industry’s decline of 29.2%.

    

 

Zacks Rank & Other Stocks to Consider

Nucor currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks worth considering in the basic materials space include Ingevity Corp. (NGVT - Free Report) , Quaker Chemical Corp. (KWR - Free Report) and Israel Chemicals Ltd. (ICL - Free Report) .

Ingevity has an expected earnings growth rate of 21.5% for the current year and carries a Zacks Rank #1 (Strong Buy). Its shares have gained 23% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Quaker Chemical has an expected earnings growth rate of 21.1% for the current year and carries a Zacks Rank #2 (Buy). Its shares have gained 27% in the past year.

Israel Chemicals has an expected earnings growth rate of 5.4% for the current year and carries a Zacks Rank #2. The company’s shares have rallied 34% over the past year.

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