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Nucor (NUE) to Report Q1 Earnings: What's in the Offing?
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Nucor Corporation (NUE - Free Report) is set to release first-quarter 2020 results ahead of the bell on Apr 28. The impacts of lower U.S. steel prices and some demand weakness across major markets due the coronavirus pandemic are likely to reflect on its results.
The U.S. steel giant beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. In this timeframe, it delivered a positive surprise of 17.4%, on average. The company posted a positive earnings surprise of 52.9% in the last reported quarter.
Nucor’s shares are down 35.4% over a year, compared with the industry’s 45.4% decline.
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
Nucor, last month, issued earnings guidance for the first quarter. It expects earnings per share between 95 cents and $1.00 for the first quarter. This reflects a rise from 35 cents in the fourth quarter of 2019 and a decline from $1.63 recorded in the year-ago quarter. The company expects earnings in its steel mills unit to increase on a sequential basis in the first quarter.
The Zacks Consensus Estimate for first-quarter consolidated revenues for Nucor is currently pegged at $5,320 million, reflecting a year-over-year decline of 12.7%.
Moreover, the Zacks Consensus Estimate for total steel mills shipments for the quarter currently stands at 5,906,000 tons, indicating a decline of 1.4% year over year. The consensus estimate for total tons shipped to outside customers is currently pegged at 6,706,000 tons, reflecting an expected decrease of 0.9% on a year-over-year basis.
The Zacks Consensus Estimate for average sales price per ton for the company’s steel mills stands at $691, suggesting a 16.3% year-over-year decline. The same for the steel products unit is pegged at $1,420, indicating a year-over-year decline of 4%.
A Few Factors to Watch
Weaker U.S. steel prices are likely to have hurt Nucor’s results in the first quarter. The coronavirus outbreak led to a downswing in domestic steel prices due to weak demand across major end-use markets like automotive and construction.
Coronavirus-induced lockdowns and quarantine restrictions affected industrial and economic activities globally during the first quarter, hurting demand for steel. The automotive industry, which consumes a big chunk of steel, is among the industries that were hit the hardest. Notably, the pandemic slowed down business activities in China, the world’s top consumer of steel, during the March quarter.
The U.S. steel industry bore the brunt of a sharp decline in domestic steel prices and the damaging impacts of trade war last year. After gaining some upward momentum in late 2019, U.S. steel prices again came under pressure during the first quarter amid the virus crisis. The benchmark hot-rolled coil steel prices tracked downward amid worries over the fast-growing coronavirus pandemic in the United States and demand slowdown.
As such, softer domestic steel prices are likely to have exerted downward pressure on Nucor’s selling prices and hurt its revenues and margins in the to-be-reported quarter.
Our proven model does not conclusively predict an earnings beat for Nucor this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Nucor is +0.61%. This is because the Most Accurate Estimate is currently pegged at 99 cents while the Zacks Consensus Estimate stands at 98 cents. 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 #5 (Strong Sell).
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:
The Scotts Miracle-Gro Company (SMG - Free Report) , scheduled to release earnings on May 6, has an Earnings ESP of +2.31% and carries a Zacks Rank #2.
Franco-Nevada Corporation (FNV - Free Report) , scheduled to release earnings on May 6, has an Earnings ESP of +1.38% and carries a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Nucor (NUE) to Report Q1 Earnings: What's in the Offing?
Nucor Corporation (NUE - Free Report) is set to release first-quarter 2020 results ahead of the bell on Apr 28. The impacts of lower U.S. steel prices and some demand weakness across major markets due the coronavirus pandemic are likely to reflect on its results.
The U.S. steel giant beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. In this timeframe, it delivered a positive surprise of 17.4%, on average. The company posted a positive earnings surprise of 52.9% in the last reported quarter.
Nucor’s shares are down 35.4% over a year, compared with the industry’s 45.4% decline.
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
Nucor, last month, issued earnings guidance for the first quarter. It expects earnings per share between 95 cents and $1.00 for the first quarter. This reflects a rise from 35 cents in the fourth quarter of 2019 and a decline from $1.63 recorded in the year-ago quarter. The company expects earnings in its steel mills unit to increase on a sequential basis in the first quarter.
The Zacks Consensus Estimate for first-quarter consolidated revenues for Nucor is currently pegged at $5,320 million, reflecting a year-over-year decline of 12.7%.
Moreover, the Zacks Consensus Estimate for total steel mills shipments for the quarter currently stands at 5,906,000 tons, indicating a decline of 1.4% year over year. The consensus estimate for total tons shipped to outside customers is currently pegged at 6,706,000 tons, reflecting an expected decrease of 0.9% on a year-over-year basis.
The Zacks Consensus Estimate for average sales price per ton for the company’s steel mills stands at $691, suggesting a 16.3% year-over-year decline. The same for the steel products unit is pegged at $1,420, indicating a year-over-year decline of 4%.
A Few Factors to Watch
Weaker U.S. steel prices are likely to have hurt Nucor’s results in the first quarter. The coronavirus outbreak led to a downswing in domestic steel prices due to weak demand across major end-use markets like automotive and construction.
Coronavirus-induced lockdowns and quarantine restrictions affected industrial and economic activities globally during the first quarter, hurting demand for steel. The automotive industry, which consumes a big chunk of steel, is among the industries that were hit the hardest. Notably, the pandemic slowed down business activities in China, the world’s top consumer of steel, during the March quarter.
The U.S. steel industry bore the brunt of a sharp decline in domestic steel prices and the damaging impacts of trade war last year. After gaining some upward momentum in late 2019, U.S. steel prices again came under pressure during the first quarter amid the virus crisis. The benchmark hot-rolled coil steel prices tracked downward amid worries over the fast-growing coronavirus pandemic in the United States and demand slowdown.
As such, softer domestic steel prices are likely to have exerted downward pressure on Nucor’s selling prices and hurt its revenues and margins in the to-be-reported quarter.
Nucor Corporation Price and EPS Surprise
Nucor Corporation price-eps-surprise | Nucor Corporation Quote
Zacks Model
Our proven model does not conclusively predict an earnings beat for Nucor this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Nucor is +0.61%. This is because the Most Accurate Estimate is currently pegged at 99 cents while the Zacks Consensus Estimate stands at 98 cents. 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 #5 (Strong Sell).
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:
Verso Corporation , expected to release earnings on May 13, has an Earnings ESP of +20.00% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Scotts Miracle-Gro Company (SMG - Free Report) , scheduled to release earnings on May 6, has an Earnings ESP of +2.31% and carries a Zacks Rank #2.
Franco-Nevada Corporation (FNV - Free Report) , scheduled to release earnings on May 6, has an Earnings ESP of +1.38% and carries a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>