Expectations about the report of the steel manufacturer Nucor turned out to be justified

Steel company Nucor Corporation (NUE) has published a positive report for the first quarter of 2021. Financial indicators have improved, and this was the reason for the growth of NUE quotes. Over the past 12 months, the shares have risen by 130.7% to $175.59 at auction on April 21.

Last week, the probability of an excellent report. Positive expectations met, and the report gave an impetus to the quotes. In the first quarter, Nucor’s net sales increased by 50% year-on-year to $10.49 billion. The average selling price of metal increased by 2% compared to the fourth quarter of last year and by 68% compared to Q1 2021.

The volume of Nucor metal supplies decreased by 11% year-on-year. At the end of the quarter, profit was $2.25 billion, or $7.97 per diluted share. The stock of cash and equivalents amounted to $4.26 billion, while the company has an unused credit line of $1.75 billion until 2026. Should note that Nucor has the best credit rating (Baa1/A-) among all American steel companies.

Last year, Nucor increased its dividends by 23% and continued to buy back shares. Probably, Nucor cannot maintain such record high growth rates for a long time. In the first quarter, steel prices have already declined, while the volume of steel imports to the United States has increased.

The cost of the metal is still high, and Nucor expects record profits in the second quarter. In addition, geopolitical uncertainty may become a driver of Nucor’s sales and profit growth. However, it is also a risk factor. According to Nucor itself, in the current quarter, there is a high demand for metal for the non-residential construction market and the profitability of Nucor’s steel, and they expect rolling industries to increase. Also, higher selling prices for raw materials remain — the company also expects an increase in profits in this segment.