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Nucor (NUE) Gears Up for Q1 Earnings: What's in the Offing?

Nucor Corporation NUE is set to release first-quarter 2021 results ahead of the bell on Apr 22. The company’s results are likely to reflect strong demand across its end markets and higher steel prices.

The U.S. steel giant surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 46.7%. It posted an earnings surprise of 9.84% in the last reported quarter.

Nucor’s shares are up 117.7% over a year, compared with the industry’s 165.4% rise.

 


 

 

Let’s see how things are shaping up for this announcement.

Zacks Model

Our proven model predicts 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 earning beat.

Earnings ESP: Earnings ESP for Nucor is +0.75%. The Zacks Consensus Estimate for earnings for the first quarter is currently pegged at $3.09. 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 #1.

What do the Estimates Say?

Nucor, last month, issued earnings guidance for the first quarter. It expects first-quarter earnings of $3.00-$3.10 per share, reflecting an increase from $1.30 in the prior quarter and 7 cents in the year-ago quarter. The projected first-quarter earnings are expected to exceed the previous record set in the third quarter of 2008 and be the highest quarterly earnings in the history of Nucor.

The Zacks Consensus Estimate for first-quarter consolidated revenues for Nucor is currently pegged at $7,475 million, reflecting a year-over-year increase of 32.9%.

Moreover, the Zacks Consensus Estimate for total steel mills shipments for the quarter currently stands at 6,106,000 tons, indicating a rise of 8.6% year over year. The consensus estimate for total tons shipped to outside customers is currently pegged at 7,041,000 tons, reflecting a decrease of 2% on a year-over-year basis.

A Few Factors to Watch

The company is likely to have gained, in the first quarter, from strength in the non-residential construction market and a strong recovery in the automotive market. Strong customer demand has led to a rebound in the automotive market. The company is also expected to have benefited from improved conditions in heavy equipment, agriculture and renewable energy markets. Higher demand is likely to have aided its shipments. Moreover, higher prices are expected to have boosted its sales and margins.

Nucor, in March, said that its steel mills and raw materials segments benefited from strong steel demand and higher prices in the first quarter. The company expects the performance of these units to be considerably higher on a sequential comparison basis in the first quarter. In the steel mills segment, it envisions the biggest increases to come from sheet and plate mills.

Meanwhile, U.S. steel prices have staged a strong recovery and hit record levels after plunging to pandemic-led multi-year lows in August 2020. The rebound has been driven by rising demand, supply constraints and higher raw material costs.

Weak end-market demand put significant pressure on benchmark hot-rolled coil (“HRC”) prices in July and August last year. However, HRC prices started to recover in September on U.S. steel mills’ back-to-back price hike actions, tight supply and surging end-market demand, especially in automotive. Notably, HRC prices zoomed past the $1,300 per short ton level last month.

As such, higher domestic steel prices are likely to have boosted Nucor’s selling prices and aided its revenues and margins in the to-be-reported quarter.

 

Nucor Corporation Price and EPS Surprise

 

Nucor Corporation price-eps-surprise | Nucor Corporation Quote

 

Stocks That Warrant a Look

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:

Dow Inc. DOW, scheduled to release earnings on Apr 22, has an Earnings ESP of +1.73% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Mosaic Company MOS, scheduled to release earnings on May 3, has an Earnings ESP of +3.06% and carries a Zacks Rank #1.

United States Steel Corporation X, scheduled to release earnings on Apr 29, has an Earnings ESP of +20.00% and carries a Zacks Rank #3.

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