Earnings Preview: Nucor

Nucor (NUE) is expected to report Q2 earnings before market open Thursday, July 17, with a conference call scheduled for 2:00 pm ET.

Guidance

The consensus estimate is $1.80 for EPS and $6.37B for revenue, according to First Call. On June 5, Nucor raised Q2 EPS guidance to $1.75 to $1.80, citing strong shipments and higher margins.

Analyst Views

It was a busy quarter for Nucor, as the company made several acquisitions. Additionally, in May, the company raised about $2.3B in an offering of 27.7M shares. It also said it planned to sell $1B in bonds at an as-yet unspecified date. Also in May, Nucor said it applied for a permit to build a $2B iron-making plant in southeastern Louisiana.

A number of the steel stocks have been rallying of late on positive Street commentary. Specifically, on July 9, UBS upgraded Nucor to Buy from Neutral citing the stocks' oversold valuation and its belief that Nucor will beat the Street's Q2 estimate and raise its guidance. Goldman, in a earnings preview note for the group, was positive, expecting strong Q2 earnings reports from steel mills and steel processors under its coverage. The firm also expects guidance on the outlook to be positive, reflecting strong global steel pricing and demand and a weak dollar, which together it believes should allow continued favorable market conditions in the US and globally to continue.

Some of the key issues for the conference call: Commentary on forward guidance, shipments and margins; details on scrap metal and other costs; and a more definitive date on the planned $1B bond sale.