Nucor (NUE) Tops Earnings, Revenue Estimates In Q4

Nucor Corporation (NYSE:NUE) saw its profits (on a reported basis) increase year over year in fourth-quarter 2017. The steel giant logged net earnings of $383.9 million or $1.20 per share for the fourth quarter, a more than two-fold increase from earnings of $159.6 million or 50 cents it registered a year ago.

Barring one-time items, earnings per share for the reported quarter came in at 65 cents, which surpassed the Zacks Consensus Estimate of 55 cents.

Nucor reported revenues of $5,092.3 million for the quarter, up roughly 28.7% year over year from $3,956.5 million. The figure surpassed the Zacks Consensus Estimate of $4,960.2 million.

FY17 Results

For full-year 2017, Nucor reported net earnings of $1.32 billion or $4.10 per share, up from earnings of $796.3 million or $2.48 in 2016.

Net sales for the full year went up roughly 25% year over year to $20.3 billion.

Operating Stats

Total steel mills shipments in the fourth quarter were 6,059,000 tons, up 18% year over year. Total tons shipped to outside customers were up 13% year over year to 6,542,000 tons. Average sales price in the quarter were up 14% year over year.

Steel mill operating rates decreased to 81% in the fourth quarter from 72% a year ago.

Segment Highlights

Nucor witnessed a decline in profitability in its Steel Mills segment in the fourth quarter compared with the previous quarter, hurt by margin compression resulting from surging imports across its end markets. Weakness in plate steel unit adversely impacted the earnings of the steel mills segment in the reported quarter on a sequential basis.

The performance of Nucor’s Raw Materials segment in the fourth quarter improved sequentially owing to improved performance of its direct reduced iron facilities.

Financial Position

Nucor ended 2017 with cash and cash equivalents of around $949.1 million, down 53.6% year over year. Long-term debt was $3,242.2 million, down around 13.3% year over year.

Outlook

Nucor expects earnings in first-quarter 2018 to increase sequentially, excluding tax reform benefits recorded in fourth-quarter 2017. The company believes that there is considerable optimism in steel end use markets. It is encouraged by positive pricing momentum, which is building throughout the quarter for all of its products in the steel mill unit.

The company expects first-quarter 2018 results to be adversely impacted by weather related interruptions at some of its sheet mills and higher scrap prices. It expects decreased earnings in the steel products unit owing to seasonality effect, while earnings in raw materials unit is expected to improve sequentially.

Price Performance

Shares of Nucor have moved up 19.3% in the last three months, underperforming the industry’s 27.8% growth.

Zacks Rank & Other Stocks to Consider

Nucor currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the basic materials space are ArcelorMittal (NYSE:MT) , Steel Dynamics, Inc. (NASDAQ:STLD) and Huntsman Corp. (NYSE:HUN) , each flaunting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

ArcelorMittal has an expected long-term earnings growth rate of 13.4%. Its shares have rallied 59.5% over a year.

Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have soared 40% in a year’s time.

Huntsman has an expected long-term earnings growth rate of 8%. Its shares surged 69.7% over a year.

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