Back to top

Image: Bigstock

Nucor (NUE) Beats Earnings and Revenue Estimates in Q1

Read MoreHide Full Article

Nucor Corporation (NUE - Free Report) registered higher profits in first-quarter 2019. The steel giant delivered net earnings of $501.8 million or $1.63 per share, up from $354.2 million or $1.10 in the year-ago quarter.

Barring one-time items, adjusted earnings per share came in at $1.55, which beat the Zacks Consensus Estimate of $1.50.

Nucor recorded net sales of $6,096.6 million, up roughly 9.5% year over year. The figure also outpaced the Zacks Consensus Estimate of $6,034.1 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 quarter were 5,989,000 tons, down 4% year over year. Total tons shipped to outside customers fell 3% year over year to 6,767,000 tons. Average sales price improved 13% year over year.

Steel mill operating rates fell to 87% from 92% in the year-ago quarter.

Segment Highlights

Profitability in the steel mills segment fell sequentially in the first quarter, affected by lower average selling prices and margins for sheet products. Additionally, harsher winter conditions delayed shipments to certain construction customers of steel mills and steel products divisions.

Performance in the raw materials unit fell sequentially in the first quarter, primarily due to margin compression in DRI businesses. The business has been experiencing a fall in average selling prices since fourth-quarter 2018.

Financial Position

Nucor ended the first quarter with cash and cash equivalents of roughly $1.6 billion, up more than two-folds year over year. Long-term debt was $4,233.8 million, up roughly 30.6% year over year.

The company repurchased around 1.2 million shares during the reported quarter. As of Mar 30, 2019, the company had roughly 304,786,000 shares outstanding and around $1.4 billion available under its share repurchase program.

Outlook

Nucor expects second-quarter 2019 earnings to be in line with first-quarter figure, barring the gain on the sale of the equity method investment.

The steel mills unit’s performance in the second quarter is expected to be consistent and in line with the first quarter. The company expects weakening margins for plate and sheet mill products to be offset by improving margins for bar and structural mill products.

Profitability of the company's steel products unit is forecast to improve considerably in the second quarter compared to the first quarter. Improved weather conditions and typical seasonal patterns are likely to benefit nonresidential construction markets.

Per the company, raw materials unit’s performance is likely to decline sequentially in the second quarter due to further margin compression in the DRI businesses.

Price Performance

Shares of Nucor have lost 8.4% in the past year compared with the industry’s 27.1% decline.



Zacks Rank & Key Picks

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

Some better-ranked stocks in the basic materials space are Sandstorm Gold Ltd. (SAND - Free Report) , Innospec Inc. (IOSP - Free Report) and Fortescue Metals Group Ltd. (FSUGY - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sandstorm Gold has an expected earnings growth rate of 200% for 2019. The company’s shares have gained 18% in the past year.

Innospec has an expected earnings growth rate of 3.5% for the current year. The company’s shares have improved 13.9% in a year’s time.

Fortescue Metals has an expected earnings growth rate of 101.5% for 2019. Its shares have surged 51.4% in a year’s time.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.

See 7 breakthrough stocks now>>

Published in