Why is Nucor (NUE) down 1.4% since its last earnings report?

A month has passed since Nucor’s (NUE) last earnings report. Shares have lost about 1.4% in that time, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Nucor due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to better understand the important catalysts.

Nucor’s earnings are lower, revenues beat estimates in the first quarter

Nucor reported earnings per share of $3.46 in the first quarter of 2024, compared to earnings of $4.45 in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate of $3.62.

The company reported net sales of approximately $8.14 billion, down approximately 7% year-over-year. This figure surpassed the Zacks Consensus Estimate of $8.03 billion.

Operational data

Total tonnes sold to third-party steel mills in the first quarter was 4,676,000 tonnes, down 3% year-over-year. This figure exceeded our estimate of 4,639,000 tonnes.

The average selling price for mills this quarter was $1,108 per tonne. This rate was lower than our estimate of $1,155 per tonne.

Overall operating rates at the company’s mills increased to 82% in the first quarter of 2024 from 79% in the prior-year quarter.

The most important information in the segment

Earnings of the company’s steelworks division increased sequentially in the reported quarter on higher average selling prices and increased volumes, particularly at sheet metal shops.

Profits in the steel products division were sequentially lower in the first quarter due to price cuts and declining volumes.

In the reported quarter, the results of the raw materials segment increased sequentially.

Financial position

Cash and cash equivalents at quarter-end were approximately $4.56 billion, up approximately 20% year-over-year. Long-term debt was approximately $6.65 billion and was essentially unchanged year over year.

During the quarter, the company repurchased approximately 5.5 million shares of common stock at an average price of $180.79 per share.

Perspectives

Nucor expects earnings to decline in the second quarter of 2024 compared to the prior quarter. The expected decline can be attributed to lower performance in the Steel Mills segment, primarily as a result of lower average selling prices, partially offset by slightly higher volumes.

Profits in the Steel Products segment are forecast to decline moderately in the second quarter due to lower average selling prices, partially masked by higher volumes. However, Nucor expects sequential earnings growth in its commodities segment in the first quarter of 2024 due to higher profitability of its direct iron reduction plants and scrap processing operations.

How have estimates changed since then?

It turns out that the estimate review has been trending downward over the past month.

As a result of these changes, the consensus estimate moved by -14.54%.

VGM results

Right now, Nucor has a weak growth score of D, which means the same momentum score. However, the stock is rated B for value, putting it in the second quintile for this investment strategy.

Overall, the stock has a Total VGM Score of C. If you’re not focused on one strategy, this score should interest you.

Perspectives

Estimates for this company are generally on a downward trend, and the magnitude of these revisions indicates a downward shift. Notably, Nucor carries a Zacks Rank #3 (Hold). We expect a linear rate of return on the stock over the next few months.

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