Profit statements

Steel stocks fall near buy point on earnings warning

Steel maker Nucor (NAKED) cautioned against earnings amid falling volumes at its steel plants, a day after steel stocks rallied to challenge a large market sell-off. Nucor shares fell early on Wednesday.

Nucor’s management was targeting fourth quarter earnings of $ 7.65 to $ 7.75 per share. That would mark a record quarter, down from $ 7.28 in the third quarter and, halfway through, a year-over-year gain of over 490%. But Wall Street analysts were expecting an average of $ 8.18, according to FactSet.

Nucor’s steel mill segment profits remain strong and are expected to be comparable to third quarter earnings “despite lower volumes caused by year-end seasonality,” Nucor said in a statement.

The new language marked a drop from October 21 on Wednesday. Nucor’s management said it expects the steel mills segment’s profit to “improve” in the fourth quarter compared to the third quarter, thanks to further profit growth at its sheet and plate factories. . The Steel Mills segment generated 67% of total company revenue and 86% of total profit (before eliminations) in the third quarter.

Nucor continues to expect increased profits from its steel products unit, according to Wednesday’s statement. And he continues to forecast that profits will fall in the raw materials segment from the third quarter due to margin squeezing at Nucor’s direct reduction iron facilities.

“Demand continues to be strong in most of the end markets we serve,” Nucor said Wednesday. “We are convinced that 2022 will be another year of strong profitability. “

The company did not offer specific guidance on Q4 EPS in its last earnings report on October 21.

Nucor Stock, Steel Stocks

Nucor’s shares fell 3.3% to 114.51 at the start of the scholarship today. Nucor stock rose 2.5% on Tuesday to briefly recover a 122.16 grip cup point of purchase, but closed under the entrance. Among other steel stocks, United States Steel (X) decreased by 3.2%, Cleveland cliffs (FCF) plunged 4.9% and Steel dynamics (STLD) lost 4%.

Steel stocks collapsed over the summer. Investors are betting on easing headwinds from the pandemic and increasing infrastructure spending in the United States under President Joe Biden.

In September, Nucor announced plans for a $ 100 million bar mill expansion, adding 600,000 tonnes of capacity. Nucor also announced that it will build a $ 2.7 billion plate plant with a capacity of 3 million tonnes.


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