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Nucor's (NUE) Earnings and Revenues Surpass Estimates in Q3

Zacks Equity Research
·4 min read

Nucor Corporation’s NUE profits declined year over year in third-quarter 2020. The steel giant logged net earnings of $193.4 million or 63 cents per share for the reported quarter, down from $275 million or 90 cents in the year-ago quarter. However, earnings per share for the reported quarter topped the Zacks Consensus Estimate of 53 cents.

Nucor recorded net sales of $4,928 million, down 10% year over year. Nevertheless, the figure beat the Zacks Consensus Estimate of $4,454.7 million.

The company stated that non-residential construction markets were strong in the third quarter. Moreover, recovery accelerated in the automotive market.

Nucor Corporation Price, Consensus and EPS Surprise

 

Nucor Corporation Price, Consensus and EPS Surprise
Nucor Corporation Price, Consensus and EPS Surprise

Nucor Corporation price-consensus-eps-surprise-chart | Nucor Corporation Quote

Operating Figures

Total steel mills shipments in the third quarter were 5,626,000 tons, down 3% year over year. Total tons shipped to outside customers were also down 3% year over year to 6,367,000 tons.  Moreover, average sales price declined 7% year over year.

Steel mill operating rates were 83% in the third quarter, flat compared with the year-ago quarter.

Segment Highlights

Performance of the company’s steel mills unit improved sequentially in the third quarter, driven by its bar and structural mills. However, challenging market conditions for its plate and sheet mills continued in the quarter.

Profitability of the steel products unit increased sequentially in the third quarter on the back of continued strength in non-residential construction markets.

Moreover, profitability in the raw materials unit improved in the reported quarter compared with second-quarter levels on improved pricing reflecting stronger steel demand.

Financial Position

At the end of the third quarter, cash and cash equivalents surged roughly 70% year over year to $2,866.6 million. Long-term debt was $5,452.2 million, up around 27% year over year.

For the first nine months, net cash generated from operating activities rose 4% year over year to around $2.2 billion.

Outlook

Nucor expects higher earnings in the fourth quarter compared with the third-quarter levels, mainly due to improved pricing at its sheet and plate mills. The company also expects raw materials unit’s earnings to increase sequentially in the fourth quarter due to improved margins at its direct reduced iron facilities.

Price Performance

Shares of Nucor have lost 13.9% year to date compared with the industry’s 12.4% decline.

 

 

Zacks Rank & Key Picks

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

Some better-ranked stocks  in the basic materials space include Agnico Eagle Mines AEM, Eldorado Gold EGO and Barrick Gold GOLD.

Agnico Eagle has a projected earnings growth rate of 104.1% for the current year. The company’s shares have rallied around 51% 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.

Eldorado Gold has a projected earnings growth rate of 2,450% for the current year. The company’s shares have shot up roughly 73% in a year. It currently carries a Zacks Rank #1.

Barrick Gold has an expected earnings growth rate of 96.1% for the current year. The company’s shares have surged around 65% in the past year. It currently carries a Zacks Rank #1.

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