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Nucor (NUE) Tops Earnings, Revenue Estimates in Q4

NucorNUE recorded a profit of $159.6 million or 50 cents per share for the fourth quarter of 2016 versus a loss of $187.5 million or 59 cents per share registered a year ago. Earnings per share for the reported quarter outstripped the Zacks Consensus Estimate of 34 cents.

Revenues rose around 14% year over year to $3,956.5 million in the reported quarter. Sales also comfortably beat the Zacks Consensus Estimate of $3,780 million.

For full-year 2016, the steel giant logged a profit of $796.3 million or $2.48 per share, up from a profit of $80.7 million or 25 cents per share in 2015.

Sales for the full year edged down 1% year over year to $16,208.1 million.

Nucor Corporation Price, Consensus and EPS Surprise

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

Operating Stats

Total steel mills shipments in the fourth quarter were 5,151,000 tons, up 16% year over year. Total tons shipped to outside customers were up 14% year over year to 5,815,000 tons. Average sales price in the quarter were flat year over year.

Steel mill operating rates rose to 74% in the reported quarter from 68% a year ago.

Segment Highlights

Nucor saw a decline in operating performance in its Steel Mills segment in the fourth quarter compared with the previous quarter, hurt by lower margins with the most significant impact was witnessed at the company's sheet mills.

The performance of Nucor's Raw Materials segment in the fourth quarter declined compared to the third due to lower pricing at its direct reduced iron ("DRI") facilities.

Nucor also saw reduced profitability in its Steel Products segment on a sequential comparison basis in the fourth quarter due to year-end seasonality.

Financial Position

Nucor ended 2016 with a strong liquidity position with cash and cash equivalents increasing roughly 5% year over year to around $2,046 million. Long-term debt was $3,739.1 million, down around 14% year over year.

Outlook

Moving ahead, Nucor expects earnings in first-quarter 2017 to increase on a sequential comparison basis. It also expects profitability for full-year 2017 to significantly exceed the level achieved in 2016.

Nucor noted that prices started to rise in the fourth quarter for its Steel Mills unit, which the company expects to continue in the first quarter. It also expects improved volume in the first quarter for the Steel Mills segment compared with the fourth, especially at its sheet and plate mills.

The company envisions a decline in profitability in its Steel Products segment in the first quarter versus the fourth due to seasonality. However, the company expects the Raw Materials segment to return to profitability in the first quarter on higher scrap prices and pricing improvement at its DRI facilities.

Nucor has outperformed the Zacks categorized Steel-Producers industry over the past three months. The company's shares gained 25.6% over this period while the industry saw a gain of 23.7%.

Nucor remains committed to expand its production capabilities and grow its business through strategic acquisitions. The company is also seeing continued momentum in the automotive market.

Nucor is a Zacks Rank #2 (Buy).

Other Stocks to Consider

Other well-placed companies in the steel space include United States Steel Corporation X , Steel Dynamics, Inc. STLD and Angang Steel Company Limited ANGGY , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

U.S. Steel has an expected long-term growth of 8%.

Steel Dynamics has an expected long-term growth of 12%.

Angang Steel has an expected earnings growth of 8.6% for the current year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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