Nucor Issues Q1 View, Expects Steel Mills Earnings To Improve
Zacks Investment Research | Mar 20, 2020 08:58AM ET
Nucor Corporation (NYSE:NUE) has issued guidance for first-quarter 2020. The steel giant expects earnings per share (EPS) between 95 cents per share and $1 per share for the first quarter of 2020. This reflects a sequential rise from EPS of 35 cents in the fourth quarter of 2019 and a fall from $1.63 recorded in the year-ago quarter.
Earnings in the steel mills unit are expected to sequentially increase in the first quarter on increased volumes and higher average selling prices, mainly in sheet, bar and plate mills.
The company expects steel products unit’s profitability to sequentially decline in the first quarter as a result of normal seasonality.
Performance of the raw materials unit is expected to rise sequentially in the first quarter on the back of improving pricing for raw materials and better performance at its DRI facilities as well as the absence of the impairment charge related to its natural gas well assets.
Nucor also stated that backlogs, order rates and utilization rates at its steel mills remained strong so far in March. This reflects a strong underlying demand for nonresidential construction as well as other end-use markets.
Update on Coronavirus
As of now, the impact of COVID-19 on the company’s supply chains and operations has been minimal. Nucor apprehends that severe impacts are probable as economic activity is disrupted. In major cities, construction sites are being shut down along with other business interruptions that may hurt its performance.
However, it’s early for the company to determine the impacts of the pandemic for 2020. Nucor is monitoring the situation as well as the recent volatility in financial and commodity markets. The company believes that it is well positioned to overcome any hurdle in the future stemming from the current situations owing to its flexible production capability, advantageous cost position and financial strength.
Price Performance
Nucor’s shares have plunged 47.6% in the past year compared with the Zacks Investment Research
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