Steel Giant Nucor Takes a Hit as Q4 Guidance Falls Short
Disappointing Earnings Projections Send Shares Tumbling
Nucor Corporation (NYSE:NUE) is feeling the heat today, with shares plummeting in premarket trading after the company released underwhelming fourth-quarter guidance. The steel giant expects earnings per share (EPS) to come in between $0.55 and $0.65, significantly lower than the consensus estimate of $0.86.
Sluggish Steel Mill Performance Weighs on Earnings
The primary culprit behind the expected earnings decline is the steel mills segment, which is struggling with decreased volumes and lower average selling prices. This trend is also expected to impact the steel products segment, leading to a decline in earnings. However, the raw materials segment is anticipated to buck this trend, with earnings expected to increase, excluding a one-time impairment charge from the third quarter of 2024.
A Look Back at Recent Performance
Nucor reported net earnings of $1.05 per share in the third quarter of 2024 and $3.16 per share in the fourth quarter of 2023. During the third-quarter earnings release, the company had already cautioned that fourth-quarter earnings per share would decrease compared to the third quarter, citing decreased steel mill segment earnings due to lower average selling prices and volumes.
Share Repurchases and Dividend Payments
In an effort to return value to shareholders, Nucor repurchased around 2.1 million shares at an average price of $149.81 per share in the fourth quarter, bringing the total year-to-date repurchases to 13.1 million shares at an average price of $168.75 per share. The company has returned over $2.73 billion to stockholders through share repurchases and dividend payments so far this year.
Upcoming Earnings Release
Nucor is set to release its fourth-quarter results on Monday, January 27, 2025. Investors looking to gain exposure to the stock can do so via the VanEck Steel ETF (NYSE:SLX) and First Trust Materials AlphaDEX Fund (NYSE:FXZ).
Current Market Performance
As of the last check Tuesday, NUE shares were down 1.51% at $122.29 premarket.
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