Nucor (NUE) Gears Up for Q2 Earnings: What's in the Cards?
Nucor Corporation NUE is set to release second-quarter 2021 results ahead of the bell on Jul 22. The company is likely to have gained in the second quarter from strong demand across its end markets and higher steel prices.
The U.S. steel giant surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missed once. It has a trailing four-quarter earnings surprise of 46.2%, on average. It posted a negative earnings surprise of 1.3% in the last reported quarter.
Nucor’s shares are up 127.7% over a year, compared with the industry’s 134.9% rise.
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 expects second-quarter earnings of between $4.60 and $4.70 per share.
The Zacks Consensus Estimate for second-quarter consolidated revenues for Nucor is currently pegged at $8,395 million, reflecting a year-over-year increase of 94%.
Moreover, the Zacks Consensus Estimate for total steel mills shipments for the quarter currently stands at 6,606,000 tons, indicating a rise of 38.5% year over year. The consensus estimate for total tons shipped to outside customers is currently pegged at 7,232,000 tons, reflecting a rise of 32% on a year-over-year basis.
A Few Factors to Watch
The company’s second-quarter results are likely to reflect the strength in automotive and non-residential construction markets. Strong customer demand has led to a rebound in the automotive market. Higher demand is likely to have aided its second-quarter shipments. Higher prices are also expected to have boosted its sales and margins.
Nucor, in June, said that its steel mills segment benefited from strong steel demand and higher prices in the second quarter. The company expects the performance of this unit to be higher on a sequential comparison basis in the second quarter on a significant increase in profitability of its sheet and plate mills.
Moreover, U.S. steel prices are on an upswing, supported by strong demand, tight supply and higher raw material costs. The benchmark hot-rolled coil (“HRC”) prices have hit record levels after plunging to multi-year lows in August 2020 amid the pandemic. HRC prices have shot up roughly fourfold from the August low of $440 per short ton.
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
Zacks Model
Our proven model does not conclusively predict an earnings beat for Nucor 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 0.00%. The Zacks Consensus Estimate for earnings for the second quarter is currently pegged at $4.77. 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:
Cabot Corporation CBT, scheduled to release earnings on Aug 9, has an Earnings ESP of +14.81% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien Ltd. NTR, scheduled to release earnings on Aug 9, has an Earnings ESP of +1.80% and carries a Zacks Rank #1.
Dow Inc. DOW, scheduled to release earnings on Jul 22, has an Earnings ESP of +3.50% and sports a Zacks Rank #1.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Nucor Corporation (NUE) : Free Stock Analysis Report
Dow Inc. (DOW) : Free Stock Analysis Report
Cabot Corporation (CBT) : Free Stock Analysis Report
Nutrien Ltd. (NTR) : Free Stock Analysis Report
To read this article on Zacks.com click here.
