Shares of Nucor (NUE) slid in premarket trading due to the steel manufacturer’s issuance of weak guidance for its third quarter earnings. The company expects earnings to be between $4.10 and $4.20 per share, falling short of the $4.61 per share estimated by analysts.
Factors Contributing to the Anticipated Decline
According to a company release, Nucor attributes the expected decline to various factors affecting different aspects of its business. Lower pricing and volumes are anticipated in both its steel mills and steel products segments. Additionally, its raw materials segment is facing challenges with tightening margins at its facilities and scrap processing operations.
Stock Performance and Market Reaction
Nucor stock experienced a decrease of 2.7% during premarket trading. As of this year, the shares have seen a 26% increase, coming into Friday’s session.
Steel Industry in Focus
Steelmakers have been receiving heightened attention from investors recently, particularly after United States Steel (X) revealed it was undergoing a strategic review. Bids were received for different parts of the business as well as for the entire company, leading to speculation about potential actions in the industry.
No Bidding Expected from Nucor
In light of the announcement by United States Steel, industry experts expressed their view that it would not make sense for Nucor to submit a bid. Nucor operates as a nonunion operation, while United States Steel workers are represented by the United Steelworkers union.
Third Quarter Earnings Report
Nucor is scheduled to release its third-quarter earnings report on October 24, before the markets open.