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Nucor (NUE) Gears Up for Q3 Earnings: What's in the Cards?

Nucor's (NUE) Q3 earnings are likely to reflect strong end-market demand and higher steel prices.

This story originally appeared on Zacks

Nucor Corporation NUE is set to release third-quarter 2021 results ahead of the bell on Oct 21. The company is likely to have benefited in the third quarter from strong demand across its end markets and a rally in domestic steel prices.

The U.S. steel giant surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missed once. It has a trailing four-quarter earnings surprise of 8.1%, on average. It posted an earnings surprise of around 4.8% in the last reported quarter.


Nucor’s shares are up 107.8% over a year, compared with the industry’s 85.7% rise.

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Zacks Investment ResearchImage Source: Zacks Investment Research

Let’s see how things are shaping up for this announcement.

What do the Estimates Say?

Nucor, last month, issued its earnings guidance for the third quarter. It expects third-quarter earnings of between $7.30 and $7.40 per share.

The Zacks Consensus Estimate for third-quarter consolidated revenues for Nucor is currently pegged at $10,098 million, reflecting a year-over-year increase of 104.9%.

The consensus estimate for total steel mills shipments for the quarter currently stands at 6,781,000 tons, indicating a rise of 20.5% year over year. The Zacks Consensus Estimate for total tons shipped to outside customers is currently pegged at 7,524,000 tons, reflecting a rise of 18.2% on a year-over-year basis.

A Few Factors to Watch

The company’s third-quarter results are likely to reflect the strength in automotive and non-residential construction markets. Strong customer demand has led to a rebound in the automotive market. The company is also seeing strength in heavy and agriculture equipment and improve conditions in energy markets. Higher demand is likely to have aided its third-quarter shipments. Higher prices are also expected to have boosted its sales and margins.

Nucor, in September, said that it expects to log record quarterly earnings in the third quarter, driven by strong demand across most of its end-markets and higher average selling prices. The company expects earnings of the steel mills segment to be higher on a sequential comparison basis in the third quarter.

U.S. steel prices have witnessed a significant rally, supported by strong demand and tight supply conditions. The benchmark hot-rolled coil (“HRC”) prices broke above $1,900 per short ton in August 2021 and remained above that level through September. HRC prices are more than four times higher than the multi-year low recorded in August 2020.

Higher domestic steel prices are likely to have boosted Nucor’s selling prices and aided its revenues and margins in the to-be-reported quarter.


Nucor Corporation Price and EPS Surprise


Nucor Corporation Price and EPS Surprise

Nucor Corporation price-eps-surprise | Nucor Corporation Quote


Zacks Model

Our proven model does not conclusively predict an earnings beat for Nucor this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Nucor is 0.00%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at $7.48. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Nucor currently carries a Zacks Rank #1.

Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Olin Corporation OLN, scheduled to release earnings on Oct 21, has an Earnings ESP of +7.45% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nutrien Ltd. NTR, scheduled to release earnings on Nov 1, has an Earnings ESP of +0.77% and carries a Zacks Rank #1.

United States Steel Corporation X, scheduled to release earnings on Oct 28, has an Earnings ESP of +2.86% and carries a Zacks Rank #2.

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United States Steel Corporation (X): Free Stock Analysis Report


Nucor Corporation (NUE): Free Stock Analysis Report


Olin Corporation (OLN): Free Stock Analysis Report


Nutrien Ltd. (NTR): Free Stock Analysis Report


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