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Nucor (NUE) Expects Earnings to Improve Sequentially in Q4

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Zacks Equity Research
·3 min read
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Nucor Corporation NUE issued its guidance for fourth-quarter 2020 (ending Dec 31, 2020).

The steel giant expects earnings per share (EPS) between $1.15 and $1.20 per share. The guidance suggests a sequential rise from EPS of 63 cents recorded in third-quarter 2020. It also suggests year-over-year increase from 35 cents recorded in the prior-year quarter.

The fourth-quarter earnings projection includes a net benefit of $39.7 million, or 13 cents per share, owing to state tax credits.

The company expects earnings to improve on back of higher pricing at the sheet and plate mills. The steel mills segment also continues to benefit from excellent results at Nucor bar and structural mills. The raw material segment’s profitability is expected to increase in the fourth quarter sequentially owing to improved financial performance of DRI facilities that are benefitting from high prices of raw materials.

Due to typical seasonality, the steel products segment’s earnings for fourth quarter are expected to decline compared with third-quarter levels.

Despite uncertainties related to the pandemic, the effect of recent price increase on the performance of sheet mills, strength of Nucor’s backlogs and overall lead times is likely to boost performance in the future.

Shares of Nucor have declined 5% in the past year against 16.6% rise of the industry.

Zacks Rank & Key Picks

Nucor currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks worth considering in the basic materials space are Bunge Limited BG, BHP Group BHP and Clearwater Paper Corporation CLW.

Bunge has a projected earnings growth rate of 43% for the current year. The company’s shares have gained around 15% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BHP has an expected earnings growth rate of around 32.4% for the current year. The company’s shares have gained around 20.3% in the past year. It currently flaunts a Zacks Rank #1.

Clearwater has an expected earnings growth rate of 1,960.9% for the current year. The company’s shares have surged around 67.6% in the past year. It currently carries a Zacks Rank #2 (Buy).

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