Could Nucor Beat Expectations in 2Q17?



Earnings in 2Q17

In the previous article, we looked at Steel Dynamics’ (STLD) 2Q17 earnings estimates and consensus recommendations. In this article, we’ll look at Nucor’s 2Q17 earnings estimates. Nucor (NUE) is scheduled to release its 2Q17 earnings on July 20. The stock has outperformed others so far in 2017. While Nucor is trading with marginal year-to-date losses, U.S. Steel Corporation (X) and AK Steel (AKS) have lost significantly this year.

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Nucor released its 2Q17 earnings guidance on June 15. The company expects to post EPS (earnings per share) of $1–$1.05 in 2Q17. In comparison, it posted EPS of $1.11 in 1Q17 and $0.76 in 2Q16. Notably, Nucor’s 2Q17 earnings guidance fell short of analysts’ estimates, and the stock saw negative price action after the guidance release. Could the stock beat the subdued expectations for 2Q17? Let’s see.

Revenue estimates for 2Q17

Analysts polled by Thomson Reuters expect Nucor to post revenue of $5.1 billion in 2Q17. The company posted revenue of $4.8 billion in 1Q17 and $4.2 billion in 2Q16. Notably, Nucor managed to post better-than-expected revenue in 1Q17. The revenue beat helped Nucor blunt the impact of lower-than-expected EPS and the stock saw upward price action after the 1Q17 release.

There are two things to consider. Although steel prices were weaker in 2Q17 than in 1Q17, Nucor could benefit from higher shipments (CLF). The company’s steel mill operations could also benefit from internal demand due to its recent downstream acquisitions. It’s also important to keep track of profitability metrics. In the next article, we’ll see what analysts expect for Nucor’s 2Q17 profitability.


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