Nucor (NUE) missed first-quarter earnings estimates and guided lower for Q2. Cleveland-Cliffs (CLF) also fell short, citing a “buyers strike from service centers,” but stuck by its full-year outlook. In after-hours trading, NUE stock fell sharply and CLF stock more moderately, after boosting its stock buyback.
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Steel Dynamics (STLD) reports late Tuesday.
Nucor cited lower average selling prices for both its steel mills and steel products segments in discussing its second-quarter outlook. However, volumes were higher vs. Q1 in both segments.
Steel service centers buy from mills and manufacturers and distribute to end customers. Cleveland-Cliffs said orders from service-center customers, after a pause in January and February, “have started to increase, with spot pricing also on the upswing.”
The auto sector, its largest end market, “is expected to remain strong,” Cleveland-Cliffs said.
The company also announced a new board authorization to buy back $1.5 billion of CLF shares, after the prior $1 billion authorization expired.
CLF Earnings
Estimates: Analysts expected Cleveland-Cliffs earnings of 22 cents per share, reversing a year-ago loss of 11 cents. Revenue should rise 1% to $5.345 billion.
Results: CLF posted Q1 EPS of 18 cents, as revenue dipped to $5.2 billion.
Outlook: The company stuck by its full-year shipment outlook of 16.5 million net tons, and said cost reductions of $30 per net ton are on track.
Nucor Earnings
On March 14, Nucor said it expected Q1 EPS of $3.55 to $3.65 per share, below the then-consensus forecast of $3.76.
Estimates: Currently, Wall Street expects Nucor earnings per share of $3.67, down 17.5% from a year ago, according to FactSet. Analysts expect revenue to fall 5% to $8.26 billion.
Results: Nucor earned $3.46 a share, down 22% from a year ago. Sales fell 7% to $8.14 billion.
Outlook: Nucor said Q2 results will decrease from Q1. Analysts were expecting Q2 EPS of $3.63.
Steel Prices ‘Make Waves’
Nucor, Cleveland-Cliffs and Steel Dynamics all enjoyed breakouts in the first quarter, peaking at the end of March as steel prices ended the quarter on a stronger note.
In its March 15 update, Steel Dynamics said, “the nonresidential construction sector remains solid.” The company also highlighted improved performance at its new Sinton, Texas, steel mill and demand from automotive, energy and industrial customers.
Steel Dynamics continued to see a positive longer-term outlook. “The continued onshoring of manufacturing, coupled with the robust U.S. infrastructure program and industrial buildouts, support strong demand in the coming years.”
However, steel prices backtracked in early April, coinciding with a pullback in the stocks. Potentially contributing to the pullback, Nucor began posting the spot price for hot-rolled coil steel offered through its own sales channel on April 8, with weekly updates.
A blog post from The Fabricator said that Nucor’s initial price of $830 a ton “made waves” because it was $70 per ton lower than the price Cleveland-Cliffs announced in late March.
NUE, CLF, STLD Stocks
CLF stock slipped 2.9% in after-hours stock market action, after closing up 0.2% in the regular session. NUE slid 6.3% to 179.68 in late trade after inching up 0.1% Monday.
STLD fell 2.4% overnight after inching up 0.3% in the regular session.
The trio of stocks all closed near their 50-day moving averages, setting up a pivotal session on Tuesday.
Be sure to read IBD’s The Big Picture column after each trading day to get the latest on the prevailing stock market trend and what it means for your trading decisions.
STLD Earnings
In mid-March, Steel Dynamics gave a Q1 EPS range of $3.51 to $3.55 vs. the $3.35 consensus.
Estimates: Steel Dynamics earnings are currently forecast to fall 12.5% to $3.51 per share. Revenue is seen slipping 3% to $4.74 billion.
Results: Check back late Tuesday.
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