CHARLOTTE, N.C. - Steelmaking giant Nucor Corporation (NYSE: NYSE:NUE) today provided guidance for the second quarter of the year, which ends on June 29, 2024. The company expects earnings to range between $2.20 and $2.30 per diluted share, a notable decrease from the $3.46 per diluted share reported in the first quarter of 2024 and $5.81 per diluted share in the second quarter of the previous year.
The anticipated drop in earnings is largely attributed to the steel mills segment, where lower average selling prices and, to a lesser extent, reduced volumes are impacting profitability. The steel products segment is also projected to experience a decline in earnings due to lower average selling prices, although this is expected to be somewhat offset by increased volumes.
In contrast, the raw materials segment is forecasted to report higher earnings, bolstered by the improved profitability of the company's direct reduced iron facilities.
Nucor has actively repurchased shares during the second quarter, buying back approximately 2.9 million shares at an average price of $170.70 per share, with a year-to-date total of around 8.5 million shares at an average price of $177.30 per share. The company has returned over $1.76 billion to its stockholders through share repurchases and dividends so far this year.
The earnings release for the second quarter is scheduled after the market closes on July 22, 2024, with a conference call to follow the next morning to discuss the results.
Nucor is a leading manufacturer of steel and steel products, with facilities across the United States, Canada, and Mexico. Its diverse product range includes carbon and alloy steel, hollow structural section tubing, and steel joists, among others. Nucor is also recognized as North America's largest recycler.
The information is based on a press release statement issued by Nucor Corporation.
In other recent news, Nucor Corporation has been making strategic moves that are expected to bolster its position in the steel industry.
The company recently announced the acquisition of Rytec Corporation, a high-performance commercial door manufacturer, for $565 million. This cash deal is seen by analysts at Jefferies as a part of Nucor's strategy to expand its downstream investments and diversify its product offerings. The acquisition is expected to enhance Nucor's market position by integrating Rytec's advanced door technology into its business model.
Simultaneously, Nucor Corporation is also experiencing a change in its executive leadership. Douglas J. Jellison, the company's Executive Vice President, is set to retire in June 2024, and Randy J. Spicer will assume the role starting May 2024. This executive transition is a result of the company's strong succession planning process, according to Leon Topalian, Nucor's Chair, President, and CEO.
On the financial front, Nucor's shares have been assigned a Hold rating by Jefferies, with a price target of $190.00. The firm cited the valuation of Nucor's shares and anticipated lower capital returns due to increased capital expenditure as reasons for this rating. Meanwhile, Citi Research has upgraded Nucor to a Buy rating, with a target price of $240.00.
These recent developments indicate Nucor's ongoing efforts to strengthen its position in the steel industry and its commitment to strategic growth and leadership continuity.
InvestingPro Insights
Amid the guidance provided by Nucor Corporation (NYSE: NUE) for the upcoming second quarter, current InvestingPro data and tips offer additional context for investors. According to InvestingPro, Nucor has a market capitalization of $36.95 billion and is trading at a price-to-earnings (P/E) ratio of 9.01, indicating a potentially attractive valuation compared to industry peers. Furthermore, the company has demonstrated a strong shareholder orientation, as evidenced by an aggressive share buyback program and a consistent track record of dividend growth, with dividends raised for 14 consecutive years.
InvestingPro Tips reveal that management's commitment to returning value to shareholders is reflected in the high shareholder yield and the maintenance of dividend payments for an impressive 52 consecutive years. Additionally, the company's stock has been identified as being in oversold territory based on the Relative Strength Index (RSI), which may suggest a potential buying opportunity for investors considering the stock's historical performance.
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