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Steel Stocks' Jan 28 Earnings Roster: NUE, X, ATI & CRS

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·7 min read
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A few steel companies are lined up to release their quarterly numbers on Jan 28. Per the Zacks industry classification, the steel industry falls under the broader Basic Materials sector. Per the latest Earnings Trends, the sector is anticipated to log growth of 11.1% in the fourth quarter — a turnaround from a decline of 11.5% suffered in the third quarter due to the COVID-19 pandemic. The comeback can primarily be attributed to demand recovery in China and rising commodity prices through the quarter.

The pandemic put most commodities on slippery ground over the past year, and steel was no exception. A slowdown in demand across major end-use industries severely impacted the steel industry for much of the first half. Nevertheless, the steel industry pulled off a comeback in the later part of 2020, buoyed by a revival in demand and an upswing in steel prices. Steel demand has picked up with resumption of operations following easing of lockdowns and restrictions globally. The rebound across major end-use industries such as construction and automotive was conducive for the steel industry. Demand for steel has been particularly strong in China driven by government spending in infrastructure projects. Steel prices are on an upswing on the back of rising demand, supply shortages and higher raw material costs.

Let’s take a look at four steel companies that are gearing up to report their quarterly numbers on Jan 28.

Nucor Corporation NUE is slated to report fourth-quarter 2020 numbers before the market opens. The company has surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 57.5%.

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

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. The company has an Earnings ESP of -1.64% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Nucor’s fourth-quarter earnings are likely to reflect higher pricing at its sheet and plate mills. The company’s to-be-reported quarter’s performance is likely to have benefited from strength in its non-residential construction markets and a strong recovery in the automotive market. Its bar and structural mills might have gained from non-residential construction. Strong customer demand has also led to a rebound in the automotive market. (Read more: Nucor to Report Q4 Earnings: What's in the Cards?)

The Zacks Consensus Estimate for fourth-quarter earnings is currently pegged at $1.22, indicating an improvement of 135% from the prior-year quarter. Notably, the estimate has moved up 21% in the past 30 days.

United States Steel Corporation X is scheduled to report fourth-quarter 2020 results before the opening bell. The company beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 17%.


United States Steel Corporation Price and EPS Surprise

United States Steel Corporation Price and EPS Surprise
United States Steel Corporation Price and EPS Surprise

United States Steel Corporation price-eps-surprise | United States Steel Corporation Quote

Our proven model does not conclusively predict an earnings beat for the company as it has an Earnings ESP of 0.00% and a Zacks Rank #3.

The company’s fourth-quarter performance is likely to have benefited from improved demand in the United States and Europe during the quarter backed by end-markets such as automotive, appliance and packaging. Higher steel prices, and benefits from improved operations and cost saving initiatives are also likely to get reflected in the fourth-quarter results. (Read more: U.S. Steel to Post Q4 Earnings: What's in the Offing?)

The Zacks Consensus Estimate for United States Steel’s fourth-quarter bottom line is currently pegged at a loss of 67 cents, wider than the loss of 64 cents in the year-ago quarter. Over the past 30 days, the Zacks Consensus Estimate has moved to a loss of 67 cents per share from the prior estimate of 82 cents per share.

Allegheny Technologies Incorporated ATI is slated to report fourth-quarter 2020 results before the opening bell. The company beat estimates in each of the trailing four quarters, the average surprise being 45.2%.

Allegheny Technologies Incorporated Price and EPS Surprise

Allegheny Technologies Incorporated Price and EPS Surprise
Allegheny Technologies Incorporated Price and EPS Surprise

Allegheny Technologies Incorporated price-eps-surprise | Allegheny Technologies Incorporated Quote

Our proven model does not conclusively predict an earnings beat for the company as it has an Earnings ESP of -9.29% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Allegheny’s fourth-quarter results are likely to reflect ongoing momentum in its defense business. Notably, the strength is broad-based across many sub-sectors and is led by demand growth for naval nuclear materials. The company has been investing resources to boost growth in the defense market, leveraging its material science capabilities and advanced process technologies, which is expected to maintain the momentum. Further, Allegheny’s cost-reduction actions might have contributed to margins in the to-be-reported quarter.

The Zacks Consensus Estimate for fourth-quarter bottom line is pegged at a loss of 37 cents. The company had reported earnings per share of 36 cents in the year-ago quarter. Over the past 30 days, the Zacks Consensus Estimate has moved from a loss of 36 cents to the current estimate of a loss of 37 cents per share.

Carpenter Technology Corporation CRS is scheduled to report second-quarter fiscal 2021 results before the market opens. The company beat the Zacks Consensus Estimate for earnings in two of the trailing four quarters and missed the same twice. It has a trailing four-quarter earnings surprise of 2.44%, on average.

Carpenter Technology Corporation Price and EPS Surprise

Carpenter Technology Corporation Price and EPS Surprise
Carpenter Technology Corporation Price and EPS Surprise

Carpenter Technology Corporation price-eps-surprise | Carpenter Technology Corporation Quote

Our proven model does not conclusively predict an earnings beat for the company as it has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell).

Lower volumes due to COVID-19 induced challenging conditions in the Aerospace and Defense and Medical end-use markets might have weighed on Carpenter Technology’s performance in the to-be-reported quarter. The energy end market also continued to be impacted by reduced drilling activity in North America. This is also likely to get reflected in the company’s fiscal second-quarter results. Further, the company’s results in the to-be-reported quarter will reflect lower volumes, a weaker mix, continued inventory reduction initiatives and COVID-19 mitigation costs. Nevertheless, the company’s cost cutting actions might have aided margins in the quarter to be reported.

The Zacks Consensus Estimate for the company’s fiscal second-quarter bottom line is pegged at a loss of 61 cents. The company had reported earnings per share of 83 cents in the year-ago quarter. Over the past 30 days, the Zacks Consensus Estimate has remained stable.

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United States Steel Corporation (X) : Free Stock Analysis Report

Nucor Corporation (NUE) : Free Stock Analysis Report

Allegheny Technologies Incorporated (ATI) : Free Stock Analysis Report

Carpenter Technology Corporation (CRS) : Free Stock Analysis Report

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