Nucor Issues Downbeat Q1 Earnings View On Lower Sheet Prices
Zacks Investment Research | Mar 18, 2019 07:42AM ET
Nucor Corporation (NYSE:NUE) has issued guidance for first-quarter 2019 (ending Mar 30).
The steel giant expects earnings per share (EPS) in the band of $1.45-$1.50 for the first quarter. This reflects a sequential decline from $2.07 in the fourth quarter of 2018. Nevertheless, the figure reflects an increase from $1.10 in the year-ago quarter.
The company’s guidance for the quarter fell short of expectations. Currently, the Zacks Consensus Estimate for first-quarter earnings is pegged at $1.61.
The results in the year-ago quarter included expenses of $21.8 million or 7 cents per share. The expenses are associated with the write-off of deferred tax assets stemming from changes in the tax status of the company’s subsidiary.
The company expects earnings in the steel mills unit to decline sequentially mainly due to lower average selling prices and margins in its sheet mill group. Per Nucor, the sheet pricing has reached the low point during the first quarter and the impact of recent price increases are encouraging. Moreover, the company is witnessing shipment delays to construction customers of steel products and steel mills units due to an unusually wet winter.
Performance in the Raw materials unit is forecast to decline sequentially due to margin compression in the DRI businesses, which was witnessing declining average selling prices since fourth-quarter 2018. Also, the company believes that the profitability in the steel products unit will be similar to fourth-quarter 2018 figures.
Nucor’s shares have lost 10.5% in the past year compared with the Zacks Investment Research
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