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Why Is Nucor (NUE) Down 2.6% Since Last Earnings Report?
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A month has gone by since the last earnings report for Nucor (NUE - Free Report) . Shares have lost about 2.6% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Nucor due for a breakout? 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 Q2 Earnings Surpass Estimates, Revenues Lag
Nucor reported earnings of $5.81 per share for second-quarter 2023, down from earnings of $9.67 per share in the year-ago quarter. Earnings per share, however, topped the Zacks Consensus Estimate of $5.59.
The company recorded net sales of $9,523.3 million, down around 19% year over year. The figure missed the Zacks Consensus Estimate of $9,733.8 million.
The company benefited from higher realized prices. It also benefited from high margins for steel mills units and increased profitability for its direct reduced iron (DRI) facilities in the reported quarter.
Operating Figures
Total sales tons to outside customers for steel mills in the second quarter were 4,774,000 tons, a 5% decrease year over year. It fell short of our estimate of 4,925,000 tons.
Average sales price for steel mills was $1,168 per ton, which fell 18% year over year but was up around 13% sequentially. It also beat our estimate of $1,088 per ton.
Overall operating rates at the company's steel mills increased to 84% in the second quarter of 2023 compared with 79% in the first quarter of 2023 and decreased from 85% in the second quarter of 2022.
Segment Highlights
Earnings of the company’s steel mills unit rose 67.5% on a sequential basis in the reported quarter on higher margins.
Earnings in the steel products division were higher by 4.1% sequentially in the second quarter due to higher volumes.
The raw materials segment’s earnings were up 138% sequentially on higher profitability from the company’s DRI facilities.
Financial Position
Cash and cash equivalents were $4,510.6 million at the end of the quarter, up 125% year over year. Long-term debt was $6,620.7 million, flat year over year.
The company repurchased roughly 3.1 million shares of its common stock at an average price of $147.03 per share during the quarter.
Outlook
For the third quarter of 2023, the company foresees a sequential decrease in earnings. This projected decline is primarily due to reduced profitability from the steel mills segment, with the most significant impact at the sheet mills.
Additionally, the steel products segment is also expected to experience a moderation in earnings during the third quarter of 2023 on a sequential basis.
Moreover, the raw materials segment is projected to witness a decrease in earnings for the third quarter of 2023 in comparison to the second quarter. This can be attributed to margin compression at the company's DRI facilities and scrap processing operations.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Nucor has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 upward for the stock, and the magnitude of these revisions looks promising. 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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Why Is Nucor (NUE) Down 2.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Nucor (NUE - Free Report) . Shares have lost about 2.6% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Nucor due for a breakout? 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 Q2 Earnings Surpass Estimates, Revenues Lag
Nucor reported earnings of $5.81 per share for second-quarter 2023, down from earnings of $9.67 per share in the year-ago quarter. Earnings per share, however, topped the Zacks Consensus Estimate of $5.59.
The company recorded net sales of $9,523.3 million, down around 19% year over year. The figure missed the Zacks Consensus Estimate of $9,733.8 million.
The company benefited from higher realized prices. It also benefited from high margins for steel mills units and increased profitability for its direct reduced iron (DRI) facilities in the reported quarter.
Operating Figures
Total sales tons to outside customers for steel mills in the second quarter were 4,774,000 tons, a 5% decrease year over year. It fell short of our estimate of 4,925,000 tons.
Average sales price for steel mills was $1,168 per ton, which fell 18% year over year but was up around 13% sequentially. It also beat our estimate of $1,088 per ton.
Overall operating rates at the company's steel mills increased to 84% in the second quarter of 2023 compared with 79% in the first quarter of 2023 and decreased from 85% in the second quarter of 2022.
Segment Highlights
Earnings of the company’s steel mills unit rose 67.5% on a sequential basis in the reported quarter on higher margins.
Earnings in the steel products division were higher by 4.1% sequentially in the second quarter due to higher volumes.
The raw materials segment’s earnings were up 138% sequentially on higher profitability from the company’s DRI facilities.
Financial Position
Cash and cash equivalents were $4,510.6 million at the end of the quarter, up 125% year over year. Long-term debt was $6,620.7 million, flat year over year.
The company repurchased roughly 3.1 million shares of its common stock at an average price of $147.03 per share during the quarter.
Outlook
For the third quarter of 2023, the company foresees a sequential decrease in earnings. This projected decline is primarily due to reduced profitability from the steel mills segment, with the most significant impact at the sheet mills.
Additionally, the steel products segment is also expected to experience a moderation in earnings during the third quarter of 2023 on a sequential basis.
Moreover, the raw materials segment is projected to witness a decrease in earnings for the third quarter of 2023 in comparison to the second quarter. This can be attributed to margin compression at the company's DRI facilities and scrap processing operations.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Nucor has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 upward for the stock, and the magnitude of these revisions looks promising. Notably, Nucor has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.