) second-quarter 2012 results were a mixed bag. The company's
adjusted earnings missed the Zacks Consensus Estimate but revenues
nudged ahead of the same.
Second Quarter Flashback
Net income (as reported) tumbled 63% year over year to $112.3
million (or 35 cents a share) from $299.8 million (or 94 cents per
share) reported a year ago.
Nucor's consolidated net sales fell slightly to $5.1 billion in
the quarter, due to a 6% decrease in average selling price per ton.
However, revenues were slightly ahead of the Zacks Consensus
Estimate of $5.07 billion, aided somewhat by a 6% improvement in
total tons shipped to outside customers.
Nucor expects earnings to decline modestly in the third quarter
of this year. The company is witnessing improved demand in end
markets such as heavy equipment, automotive, general manufacturing
and energy. However, a sluggish construction market, industry
oversupply and increased imports into the domestic market are
causes for concern.
We have discussed the quarterly results at length here:
Nucor Misses on Bottom Line
Agreement - Estimate Revisions
Estimates for Nucor have not moved much over the past week. Out
of 13 analysts covering the stock, 1 has decreased the earnings
estimate for fiscal 2012 over the past 7 days, while none moved in
the opposite direction. None of the 14 analysts have changed their
estimates for the third quarter over the past week.
Estimates for 2012 demonstrate a strong negative bias over the
last 30 days with 10 analysts lowering their estimates while 3
upward revisions were witnessed. For the third quarter, estimates
are negatively inclined over the past month with 6 analysts
lowering their forecasts while 5 making positive revisions.
Magnitude - Consensus Estimate Trend
Estimate for the third quarter witnessed no movement over the
past week. However, estimate for 2012 has been trimmed by 1 cent
over the same period. The decline has been much more pronounced
over the last month, with estimate for the third quarter having
decreased by 6 cents and for 2012 by 9 cents.
The current Zacks Consensus Estimates for the third quarter and
2012 are 44 cents and $1.77 a share, respectively.
Nucor is a leading producer of structural steel, steel bars,
steel joists, steel deck and cold finished bars in the U.S.,
operating around 123 facilities primarily in the U.S. and Canada.
The company follows a well-defined growth strategy by streamlining
and improving its existing operations, executing its raw material
strategy, developing Greenfield projects to enable it to benefit
from new technologies and opportunities, and through acquisitions
and joint-ventures in international markets.
However, oversupply in the industry has undermined the seasonal
pricing momentum usually seen in the early part of the year and
this affected Nucor's performance. Moreover, production ramp ups by
domestic steel producers had a negative effect on the U.S. sheet
On a positive note, Nucor's rebar fabrication, joist and
decking, and pre-engineered metal buildings businesses performed
well and the company expects this trend to continue into the third
quarter. However, the construction market is still depressed and
its recovery might become more difficult in the midst of economic
We currently have a long-term Neutral recommendation on Nucor.
The company, which competes with
Commercial Metals Co.
United States Steel Corp.
), maintains a Zacks #4 Rank, which translates into a short-term (1
to 3 months) Sell rating.
About Earnings Estimate Scorecard
As a PhD from MIT, Len Zacks proved over 30 years ago that
earnings estimate revisions are the most powerful force impacting
stock prices. He turned this ground breaking discovery into two
of the most celebrated stock rating systems in use today. The
Zacks Rank for stock trading in a 1 to 3 month time horizon and
the Zacks Recommendation for long-term investing (6+ months).
These "Earnings Estimate Scorecard" articles help analyze the
important aspects of estimate revisions for each stock after
their quarterly earnings announcements. Learn more about earnings
estimates and our proven stock ratings at
COMMERCIAL METL (CMC): Free Stock Analysis
NUCOR CORP (NUE): Free Stock Analysis Report
UTD STATES STL (X): Free Stock Analysis Report
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