Nucor’s Financial Performance to Improve in 3Q15?



Nucor’s financial performance

Nucor Corporation (NUE), the largest steel company in the United States, reported its 2Q15 earnings on July 23. The company reported an EPS (earnings per share) of $0.39 in the quarter, beating analysts’ estimates. The EPS was also significantly higher than Nucor’s guidance of $0.20–$0.25.

Nucor’s share price went up ~3% after its earnings release.

However, on a year-to-date basis, Nucor has lost more than 15% as of September 10, 2015, as the chart above shows. The stock market performance of the U.S. Steel Corporation (X) and AK Steel Holding Corporation (AKS) has been even worse, losing 45% and 55%, respectively, over the same period.

Steel Dynamics (STLD) has been among the best performing steel companies this year. Its stock has fallen only about 5% since the beginning of 2015.

Currently, Steel Dynamics forms 0.30% of the SPDR S&P MidCap 400 ETF (MDY).

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Series overview

In this series, we’ll analyze Nucor’s 2Q15 earnings. We’ll explore what factors drove Nucor’s 2Q15 financial performance, and we’ll also analyze Nucor’s outlook amid the challenging steel market conditions.

Finally, we’ll see whether Nucor’s current valuations look attractive after the recent sell-off in metal shares.

Company overview

Nucor manufactures both raw steel and steel products like fasteners, girders, joists, and decks. It also has scrap processing operations.

In 2008, Nucor acquired the David J. Joseph Company, which is the world leader in scrap metal brokerage. It not only helps Nucor secure steel scrap for its steel plants, but also helps earn brokerage income from third parties.

In the next part of this series, we’ll look at Nucor’s consolidated 2Q15 financial performance.


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