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Nucor Provides Downbeat Q3 Earnings View on Lower Prices

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Nucor Corporation (NUE - Free Report) has issued guidance for third-quarter 2019 (ending Sep 28, 2019).

The steel giant expects earnings per share (EPS) in the band of 75-80 cents for the third quarter of 2019. This reflects a sequential decline from the EPS of $1.26 in the second quarter and a fall from $2.13 recorded in the year-ago quarter.

Nucor expects performance in the steel mills unit to sequentially decline in the third quarter of 2019 mainly due to lower prices for sheet and plate steel. The company stated that it sees stability in most of the end use markets that it serves. However, automotive, power transmission and agricultural products markets remain weak.

The steel products unit’s profitability is expected to improve sequentially in the third quarter backed by favorable conditions in the non-residential construction market. Additionally, the recently-implemented efficiency initiatives in metal buildings and rebar fabrication are likely to boost performance of these businesses.

Nucor expects performance of the raw materials unit to decline sequentially in the third quarter due to further margin compression in its direct reduced iron (DRI) businesses. Moreover, the Louisiana-based DRI facility started a planned outage last week, which is expected to last till mid-November.

Nucor’s shares have lost 17.3% in the past year compared with the industry’s 27.7% decline.



Zacks Rank & Key Picks

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

Some better-ranked stocks in the basic materials space are Kinross Gold Corporation (KGC - Free Report) , Alamos Gold Inc (AGI - Free Report) and Arconic Inc , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross has an expected earnings growth rate of 155.7% for 2019. The company’s shares have surged 63.4% in the past year.

Alamos Gold has projected earnings growth rate of 324% for the current year. The company’s shares have rallied 42.7% in a year’s time.

Arconic has an estimated earnings growth rate of 50% for the current year. Its shares have moved up 18.3% in the past year.

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