Steel giant Nucor (NUE) guided low on Q1 earnings Friday due to lower prices and margins in the sheet mill group. Nucor stock edged up on the stock market.


Management also said the performance of its raw materials segment is likely to be down due to margin compression. Meanwhile, an unusually wet winter season was cited as a cause of shipment delays to construction customers. But Nucor also said sheet prices are turning around.

“We believe that sheet pricing reached the low point during the first quarter and are encouraged by the impact of recent price increases,” Nucor said in a news release.

Nucor expects Q1 earnings to be in the range of $1.45-$1.50 per share, below Wall Street expectations for $1.62. A year ago, it earned $1.17.

Nucor Stock Technical Analysis

Shares fell 0.5% to 58.53 on the stock market today. Nucor stock has been consolidating for the past 61 weeks, MarketSmith analysis shows. However it remains far from its buy point of 70.58.

A more attainable near-term goal is to retake its 200-day moving average. However, the stock has been turned away several times at the key technical benchmark, while its relative strength line has been on a downward trend. Retaking the 200-day would not move the stock into buy territory, but would be a bullish indicator.

Nucor stock is the top-rated stock in the Steel-Producers Industry Group. However, it holds a mediocre IBD Composite Rating of 69. The Stock Checkup Tool shows earnings are extremely strong, which has helped it attain a best-possible EPS Rating of 99. In the last three quarters EPS growth has averaged 172%, which is far above its three year EPS growth rate of 60%.

Despite the strong earnings, its market performance has lagged, which is why it has a Relative Strength Rating of just 36.

Among other steel stocks, Steel Dynamics (STLD) closed flat, AK Steel (AKS) slid 1.1% and US Steel (X) fell 0.7%.

Steel Prices Fall From Peak

Back in January steel prices in the U.S. dropped below the levels they had before President Donald Trump announced tariffs on imports last year.

Prices have dropped even lower since then, and the S&P Global Platts benchmark price for hot-rolled steel coil was $693 per short ton Friday. This is far from the peak $920 last July.

Meanwhile, the tariffs do not seem to be slowing the steel industry in China. The communist country’s daily steel output rose in January and February.

Average daily steel output in that country over the two months reached 2.54 million tons, up from 2.32 million tons in the same months last year.

Mills are said to have increased production due to solid margins and easier environmental restrictions.


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