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The U.S. steel giant surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing once. It has a trailing four-quarter earnings surprise of 4.6%, on average. It posted a negative earnings surprise of 4.4% in the last reported quarter. Lower earnings in the steel mills segment on weaker selling prices and volumes are likely to have hurt its second-quarter results.
Nucor’s shares are down 4.8% year to date, compared with the industry’s 13.8% decline.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
Nucor, last month, issued its earnings guidance for the second quarter. It anticipates second-quarter earnings in the range of $2.20-$2.30 per share.
The Zacks Consensus Estimate for second-quarter consolidated revenues for Nucor is currently pegged at $7,645.2 million, reflecting a year-over-year decline of 19.7%.
A Few Factors to Watch
Lower profitability in the steel mills segment is expected to have weighed on Nucor’s performance in the quarter to be reported. Nucor, in June, said that it expects reduced earnings in the steel mills segment sequentially, mainly due to lower average selling prices and, to a lesser extent, lower volumes.
Our estimate for total sales tons to outside customers for steel mills is pegged at 4,641,000 tons for the second quarter, suggesting a decline from 4,676,000 tons reported in the prior quarter and a 2.8% year-over-year decrease.
NUE also sees lower earnings in the steel products segment due to lower average selling prices, partly offset by increased volumes. However, earnings in the raw materials segment are projected to be higher compared with the first quarter, thanks to increased profitability at Nucor's direct reduced iron facilities.
Meanwhile, U.S. steel prices have seen a significant downward correction this year after a strong run in late 2023 that extended into early 2024. The benchmark hot-rolled coil (HRC) prices retreated since early 2024, with prices plummeting to below $800 per short ton in March 2024 from $1,200 per short ton at the start of the year. A combination of factors led to the downswing, including a pullback in steel mill lead times, an oversupply of steel exacerbated by increased imports, reduced demand from key industries and global economic uncertainties. U.S. HRC prices continued their downward slide in the second quarter, being pressured by an influx of imports, currently hovering below the $700 per short ton level.
Lower average selling prices are likely to have hurt NUE’s sales and margins in the quarter to be reported.
Our estimate for second-quarter average sales price per ton for the company’s steel mills unit stands at $958, suggesting an 18% year-over-year decrease and a 13.5% sequential decline.
Our proven model does not conclusively predict an earnings beat for NUE this season. 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 +0.06%. The Zacks Consensus Estimate for earnings for the second quarter is currently pegged at $2.30. 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 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:
The consensus estimate for AEM’s earnings for the second quarter is currently pegged at 82 cents.
ATI Inc. (ATI - Free Report) , slated to release earnings on Aug 6, has an Earnings ESP of +3.50% and carries a Zacks Rank #3 at present.
The consensus mark for ATI’s second-quarter earnings is currently pegged at 58 cents.
Kinross Gold Corporation (KGC - Free Report) , scheduled to release second-quarter earnings on Jul 31, has an Earnings ESP of +18.85%.
The Zacks Consensus Estimate for Kinross Gold's earnings for the second quarter is currently pegged at 12 cents. KGC currently carries a Zacks Rank #2.
Image: Bigstock
Will Weaker Steel Prices Weigh on Nucor's (NUE) Earnings in Q2?
Nucor Corporation (NUE - Free Report) is set to release second-quarter 2024 results after the closing bell on Jul 22.
The U.S. steel giant surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing once. It has a trailing four-quarter earnings surprise of 4.6%, on average. It posted a negative earnings surprise of 4.4% in the last reported quarter. Lower earnings in the steel mills segment on weaker selling prices and volumes are likely to have hurt its second-quarter results.
Nucor’s shares are down 4.8% year to date, compared with the industry’s 13.8% decline.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
Nucor, last month, issued its earnings guidance for the second quarter. It anticipates second-quarter earnings in the range of $2.20-$2.30 per share.
The Zacks Consensus Estimate for second-quarter consolidated revenues for Nucor is currently pegged at $7,645.2 million, reflecting a year-over-year decline of 19.7%.
A Few Factors to Watch
Lower profitability in the steel mills segment is expected to have weighed on Nucor’s performance in the quarter to be reported. Nucor, in June, said that it expects reduced earnings in the steel mills segment sequentially, mainly due to lower average selling prices and, to a lesser extent, lower volumes.
Our estimate for total sales tons to outside customers for steel mills is pegged at 4,641,000 tons for the second quarter, suggesting a decline from 4,676,000 tons reported in the prior quarter and a 2.8% year-over-year decrease.
NUE also sees lower earnings in the steel products segment due to lower average selling prices, partly offset by increased volumes. However, earnings in the raw materials segment are projected to be higher compared with the first quarter, thanks to increased profitability at Nucor's direct reduced iron facilities.
Meanwhile, U.S. steel prices have seen a significant downward correction this year after a strong run in late 2023 that extended into early 2024. The benchmark hot-rolled coil (HRC) prices retreated since early 2024, with prices plummeting to below $800 per short ton in March 2024 from $1,200 per short ton at the start of the year. A combination of factors led to the downswing, including a pullback in steel mill lead times, an oversupply of steel exacerbated by increased imports, reduced demand from key industries and global economic uncertainties. U.S. HRC prices continued their downward slide in the second quarter, being pressured by an influx of imports, currently hovering below the $700 per short ton level.
Lower average selling prices are likely to have hurt NUE’s sales and margins in the quarter to be reported.
Our estimate for second-quarter average sales price per ton for the company’s steel mills unit stands at $958, suggesting an 18% year-over-year decrease and a 13.5% sequential decline.
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 NUE this season. 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 +0.06%. The Zacks Consensus Estimate for earnings for the second quarter is currently pegged at $2.30. 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 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:
Agnico Eagle Mines Limited (AEM - Free Report) , scheduled to release earnings on Jul 31, has an Earnings ESP of +5.93% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for AEM’s earnings for the second quarter is currently pegged at 82 cents.
ATI Inc. (ATI - Free Report) , slated to release earnings on Aug 6, has an Earnings ESP of +3.50% and carries a Zacks Rank #3 at present.
The consensus mark for ATI’s second-quarter earnings is currently pegged at 58 cents.
Kinross Gold Corporation (KGC - Free Report) , scheduled to release second-quarter earnings on Jul 31, has an Earnings ESP of +18.85%.
The Zacks Consensus Estimate for Kinross Gold's earnings for the second quarter is currently pegged at 12 cents. KGC currently carries a Zacks Rank #2.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.