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Will Higher Sales Prices Aid Nucor's (NUE) Q2 Earnings?

·3 min read

Nucor Corporation NUE is scheduled to come up with second-quarter 2021 results ahead of the bell on Jul 22. The rally in domestic steel prices on the back of on an upswing in demand and supply constraints is likely to have driven the steel giant’s sales and margins in the second quarter. The benefits of higher plate and sheet sales prices are expected to reflect on the performance of the company’s steel mills business.

Higher Prices to Drive Profitability

Profitability across Nucor’s steel mills and steel products segments is expected to have boosted by higher average sales prices in the June quarter. In the steel mills unit, sheet and plate are likely to have witnessed an increase in sales prices in the second quarter, driving results for these product groups.

The Zacks Consensus Estimate for second-quarter average sales price per ton for the company’s steel mills unit stands at $1,113, suggesting a 65.6% year-over-year increase. The same for plate products is pinned at $1,151, reflecting a year-over-year rise of 63.3%. The Zacks Consensus Estimate for sheet products stands at $1,236, which reflects a year-over-year increase of 93.1%.

Moreover, the consensus estimate for average sales price per ton for the company’s steel products unit is pegged at $1,591, suggesting a year-over-year rise of 16%.

Notably, U.S. steel prices have witnessed an unprecedented surge this year driven by strong underlying supply and demand fundamentals. The benchmark hot-rolled coil (“HRC”) prices witnessed a significant upswing during the June quarter riding on solid demand in key end-markets such as automotive and construction, supply shortages and higher steel input costs. HRC prices shot past the $1,600 per short ton level in May 2021 and remained above that level through June. The effects of the price surge are likely to get reflected on Nucor’s top and bottom lines in the second quarter.

Nucor Corporation Price and EPS Surprise

Nucor Corporation Price and EPS Surprise
Nucor Corporation Price and EPS Surprise

Nucor Corporation price-eps-surprise | Nucor Corporation Quote

Overall Expectations

The Zacks Consensus Estimate for second-quarter consolidated revenues for Nucor is currently pegged at $8,312 million, reflecting a year-over-year increase of 92.1%. The consensus estimate for earnings is $4.87, which indicates a substantial rise from the prior-year reported number.

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 -1.23%. 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.

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:

LyondellBasell Industries N.V. LYB, scheduled to release earnings on Jul 30, has an Earnings ESP of +15.13% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dow Inc. DOW, scheduled to release earnings on Jul 22, has an Earnings ESP of +5.57% and sports a Zacks Rank #1.

Celanese Corporation CE, scheduled to release earnings on Jul 22, has an Earnings ESP of +8.38% and carries a Zacks Rank #2.


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Nucor Corporation (NUE) : Free Stock Analysis Report

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LyondellBasell Industries N.V. (LYB) : Free Stock Analysis Report

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