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Nucor’s 1Q17 Revenue: What Makes Analysts So Bullish?

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Apr. 14 2017, Updated 8:07 a.m. ET

Nucor’s 1Q17 revenue

In the previous article, we looked at Steel Dynamics’ (STLD) 1Q17 earnings estimates. In this article, we’ll see what analysts expect for Nucor’s (NUE) 1Q17 earnings.

Nucor is scheduled to release its 1Q17 results on April 20, 2017. Let’s begin by looking at Nucor’s 1Q17 revenue estimates.

Analysts expect Nucor to post revenue of ~$4.6 billion in 1Q17. To put this in context, consider that the company posted revenue of ~$4.0 billion in 4Q16 and ~$3.7 billion in 1Q16. 

Analysts are optimistic about Nucor’s 1Q17 revenue, expecting it to rise on a YoY (year-over-year) basis as well as on a sequential basis. Expectations of a rise have been led by the company’s organic and inorganic growth.

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Higher shipments, selling prices

Looking at organic growth, Nucor’s steel mill operations should benefit from higher steel shipments as well as higher average selling prices. According to data released by the American Iron and Steel Institute, US steel production rose 4.1% YoY in 1Q17.

Higher US steel production should help steelmakers’ 1Q17 steel shipments (XME). Also, as we noted earlier in the series, steel prices were strong in 1Q17, which should translate to higher average selling prices for Nucor and other producers such as U.S. Steel Corporation (X) and AK Steel (AKS).

Acquisitions

Nucor made two acquisitions in the pipe and tube market in 4Q16. According to the company, the combined tubular shipments of these acquisitions totaled ~1 million tons in 2016. These acquisitions should also boost Nucor’s 1Q17 revenue.

Along with revenue, it’s also pertinent to look at profitability metrics. In the next article, we’ll see what analysts expect for Nucor’s 1Q17 profits.

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