Nucor Corporation (NYSE:NUE) is seeing a dip in its share prices as premarket trading begins today. The company, on Monday, set out its expectations for the fourth quarter, predicting earnings per share (EPS) to land between $0.55 and $0.65, which falls short of the $0.86 that analysts had expected.
What’s driving this drop in earnings expectations? Nucor’s steel mills segment is facing lower earnings, primarily due to a slump in sales volumes and average selling prices. The steel products segment isn’t faring much better, mirroring these trends. On a more positive note, the raw materials segment is set to see a boost in earnings, excluding any impairment charges from the third quarter of 2024.
In the third quarter of 2024, Nucor reported net earnings of $1.05 per share, a descent from the $3.16 per share it recorded in the final quarter of 2023. It’s worth mentioning that in their third-quarter earnings announcement, Nucor had already warned of an expected dip in fourth-quarter earnings per share, forecasting lower revenues for the steel mills segment owing to diminished average selling prices and volumes.
Amid these challenges, Nucor repurchased about 2.1 million shares in the fourth quarter at an average price of $149.81 each, pushing total share repurchases for the year to 13.1 million shares, averaging at $168.75 per share. This year, the company has returned over $2.73 billion to its stockholders through both share repurchases and dividend payments.
Despite the current challenges, in October, Nucor managed to post adjusted quarterly earnings of $1.49 per share, edging out analysts’ estimates of $1.47, and reported revenue of $7.44 billion, surpassing the expected $7.28 billion.
Looking ahead, Nucor plans to announce its fourth-quarter results on Monday, January 27, 2025. Investors interested in gaining exposure to Nucor’s stock might consider using investment vehicles like the VanEck Steel ETF (NYSE:SLX) and the First Trust Materials AlphaDEX Fund (NYSE:FXZ).
In terms of stock performance, NUE shares have slipped by 1.51%, trading at $122.29 in premarket sessions as of the last update on Tuesday.
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