Buckle Your Seatbelts for Steel Companies’ 1Q17 Earnings

The 1Q17 earnings season has started for the steel industry. The season will kick off with Steel Dynamics, which is scheduled to release its 1Q17 financial results on April 19, 2017.

Nucor (NUE) is expected to release its 1Q17 earnings on April 20, followed by AK Steel’s (AKS) release on April 24. U.S. Steel Corporation (X) will also release its 1Q17 earnings on April 24, which it will follow with a conference call the next day.

Steel stocks were in consolidation mode in 1Q17 after their spectacular rally in 4Q16. While ArcelorMittal (MT) rose 15.7% during the quarter, AK Steel saw a fall of almost 30%.

U.S. Steel closed with a marginal rise in 1Q17. Prior to that, steel stocks had been flying high in 4Q16 after President Donald Trump’s election sparked a massive rally. AK Steel and U.S. Steel both rose more than 300% in 2016 as investors flocked to steel stocks in anticipation of higher US steel demand (DIA) (DJIA-INDEX) and tougher trade policies under the Trump administration.

Trump’s presidency certainly helped to revive the market sentiment for steel, boosting steelmakers’ prices. However, remember that in the medium to long term, earnings are key drivers of stock prices.

In this series, we’ll look at leading steelmakers’ earnings estimates. We’ll also look at the earnings guidances provided by Nucor and Steel Dynamics and map these against analysts’ estimates.

Before we look at steel companies’ earnings estimates, let’s look at some other factors that could drive their performances in April.