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Nucor (NUE) Up 1.4% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Nucor (NUE - Free Report) . Shares have added about 1.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Nucor due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Nucor's Earnings and Sales Surpass Estimates in Q1
Nucor’s profits declined year over year in first-quarter 2020. The company logged net earnings of $20.3 million or 7 cents per share, down from $501.8 million or $1.63 in the year-ago quarter.
Barring one-time items, adjusted earnings per share came in at 99 cents that topped the Zacks Consensus Estimate of 98 cents.
Nucor recorded net sales of $5,624.3 million, down 7.7% year over year. The figure beat the Zacks Consensus Estimate of $5,320.5 million.
Operating Figures
Total steel mills shipments in the first quarter were 6,498,000 tons, up 8% year over year. Total tons shipped to outside customers were up 6% year over year to 7,187,000 tons. Average sales price declined 13% year over year.
Steel mill operating rates were 89% in the first quarter compared with 87% in the prior-year quarter.
Segment Highlights
Barring impairment charges, profitability in the steel mills segment increased sequentially in the first quarter due to higher volumes and selling prices at Nucor’s sheet and bar mills.
The performance of steel products unit improved in the quarter compared with fourth-quarter levels. The upside can be attributed to higher volumes.
Profitability in the raw materials division rose sequentially owing to improvement in raw materials pricing as well as improved performance at Nucor’s DRI facilities and the absence of the impairment charge.
Financial Position
Nucor ended the first quarter with cash and cash equivalents of around $1.25 billion, down around 20% year over year. Long-term debt was $4,243.2 million, up 0.2% year over year.
Net cash generated from operating activities declined 69.1% year over year to $201 million.
Currently, the company’s credit ratings are unchanged at Baa1/A- with stable outlooks at both Moody's and Standard & Poor's. Nucor also paid and increased its regular dividend for 47 consecutive years and expects to continue this practice.
The company repurchased around 0.8 million shares of its common stock during the first quarter. As of Apr 4, the company had around 301,135,000 shares outstanding and nearly $1.16 billion remaining for repurchases under its authorized share repurchase program.
Outlook
Nucor stated that the impact of the coronavirus pandemic has been varied across its different product groups. While the energy and automotive markets witnessed the steepest decline, non-residential construction has been resilient through challenging times.
The company anticipates to report a loss in second-quarter 2020. Moreover, the duration of the coronavirus-induced downturn is difficult to predict at the moment and economic outlook remains uncertain, the company noted. Nucor believes that market conditions will bottom out in the second quarter and it will return to profitability in the second half of 2020.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -115% due to these changes.
VGM Scores
Currently, Nucor has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Nucor has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Nucor (NUE) Up 1.4% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Nucor (NUE - Free Report) . Shares have added about 1.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Nucor due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Nucor's Earnings and Sales Surpass Estimates in Q1
Nucor’s profits declined year over year in first-quarter 2020. The company logged net earnings of $20.3 million or 7 cents per share, down from $501.8 million or $1.63 in the year-ago quarter.
Barring one-time items, adjusted earnings per share came in at 99 cents that topped the Zacks Consensus Estimate of 98 cents.
Nucor recorded net sales of $5,624.3 million, down 7.7% year over year. The figure beat the Zacks Consensus Estimate of $5,320.5 million.
Operating Figures
Total steel mills shipments in the first quarter were 6,498,000 tons, up 8% year over year. Total tons shipped to outside customers were up 6% year over year to 7,187,000 tons. Average sales price declined 13% year over year.
Steel mill operating rates were 89% in the first quarter compared with 87% in the prior-year quarter.
Segment Highlights
Barring impairment charges, profitability in the steel mills segment increased sequentially in the first quarter due to higher volumes and selling prices at Nucor’s sheet and bar mills.
The performance of steel products unit improved in the quarter compared with fourth-quarter levels. The upside can be attributed to higher volumes.
Profitability in the raw materials division rose sequentially owing to improvement in raw materials pricing as well as improved performance at Nucor’s DRI facilities and the absence of the impairment charge.
Financial Position
Nucor ended the first quarter with cash and cash equivalents of around $1.25 billion, down around 20% year over year. Long-term debt was $4,243.2 million, up 0.2% year over year.
Net cash generated from operating activities declined 69.1% year over year to $201 million.
Currently, the company’s credit ratings are unchanged at Baa1/A- with stable outlooks at both Moody's and Standard & Poor's. Nucor also paid and increased its regular dividend for 47 consecutive years and expects to continue this practice.
The company repurchased around 0.8 million shares of its common stock during the first quarter. As of Apr 4, the company had around 301,135,000 shares outstanding and nearly $1.16 billion remaining for repurchases under its authorized share repurchase program.
Outlook
Nucor stated that the impact of the coronavirus pandemic has been varied across its different product groups. While the energy and automotive markets witnessed the steepest decline, non-residential construction has been resilient through challenging times.
The company anticipates to report a loss in second-quarter 2020. Moreover, the duration of the coronavirus-induced downturn is difficult to predict at the moment and economic outlook remains uncertain, the company noted. Nucor believes that market conditions will bottom out in the second quarter and it will return to profitability in the second half of 2020.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -115% due to these changes.
VGM Scores
Currently, Nucor has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Nucor has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.