Nucor Corporation
NUE
logged net earnings of $398.8 million or $1.30 per share in fourth-quarter 2020, up from $107.8 million or 35 cents in the year-ago quarter.
Barring one-time items, adjusted earnings were $1.34 per share for the reported quarter, topping the Zacks Consensus Estimate of $1.22.
The steel giant recorded net sales of $5,260.1 million, up around 3% year over year. The figure, however, missed the Zacks Consensus Estimate of $5,405.5 million.
Nucor Corporation Price, Consensus and EPS Surprise
Nucor Corporation price-consensus-eps-surprise-chart
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Nucor Corporation Quote
Operating Figures
Total steel mills shipments in the fourth quarter were 5,793,000 tons, flat year over year. Total tons shipped to outside customers were also flat year over year at 6,486,000 tons. Moreover, average sales price rose 3% year over year.
Steel mill operating rates were 87% in the fourth quarter, up from 83% in the year-ago quarter.
Segment Highlights
The company’s steel mills unit benefited from strong results at its bar and structural mills in the fourth quarter.
The steel products unit also had another strong quarter on the back of a resilient non-residential construction market.
Moreover, profitability in the raw materials unit improved in the reported quarter compared with third-quarter levels on improved performance of the company’s direct reduced iron facilities that are benefitting from higher average selling prices for raw materials.
FY20 Results
Earnings (as reported) for full-year 2020 were $2.36 per share, down from $4.14 per share a year ago. Net sales declined around 11% to roughly $20.1 billion.
Financial Position
At the end of 2020, cash and cash equivalents surged roughly 72% year over year to $2,639.7 million. Long-term debt was $5,271 million, up around 23% year over year.
Cash from operating activities fell 4% year over year to around $2.7 billion for full-year 2020.
Outlook
Nucor expects significantly higher earnings in the first quarter of 2021 compared with the fourth-quarter levels. While non-residential construction and automotive markets remain strong, conditions are improving in heavy equipment, agriculture, renewable energy and on-highway truck and trailer, the company noted.
The company expects increased profitability of the steel mills segment in the first quarter of 2021 on a sequential comparison basis. However, it sees sequentially lower profitability of the downstream steel products segment in the first quarter due to seasonal patterns and some margin compression associated with the delay between increases in selling prices and rising steel input costs.
Nucor also sees performance in the raw materials segment to significantly improve in the first quarter compared with the fourth quarter on higher raw materials selling prices.
Price Performance
Shares of Nucor have gained 6.7% over a year compared with the
industry
’s 26.8% rise.
Zacks Rank & Key Picks
Nucor currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include
Fortescue Metals Group Limited
FSUGY
,
Impala Platinum Holdings Limited
IMPUY
and
BHP Group
BHP
.
Fortescue has a projected earnings growth rate of 75.5% for the current fiscal. The company’s shares have surged around 129% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Impala Platinum has an expected earnings growth rate of 189.4% for the current fiscal. The company’s shares have rallied around 42% in the past year. It currently carries a Zacks Rank #1.
BHP Group has a projected earnings growth rate of 59.5% for the current fiscal year. The company’s shares have gained around 30% in a year. It currently carries a Zacks Rank #1.
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