Nucor shares fall 2% on Q4 earnings miss
Steelmaker posts 19.7% EPS shortfall but upbeat on 2026, citing higher volumes and pricing
Nucor Corporation shares declined 2.2% on Monday after the largest US steel producer reported fourth-quarter earnings that fell short of Wall Street expectations, though the company offered optimistic guidance for the first quarter of 2026.
The Charlotte-based manufacturer reported adjusted earnings per share of $1.73 for the quarter ended December 31, missing analyst estimates of $2.16 by 19.7%. Revenue reached $7.69 billion, down 5.7% from the $8.15 billion consensus forecast. The results represented a sharp sequential decline from the third quarter's $2.63 per share.
The earnings shortfall reflected margin compression across Nucor's three business segments, which include steel mills, steel products, and raw materials. The company has faced challenging market conditions as steel prices softened from earlier highs while input costs remained elevated.
Despite the disappointing quarter, Nucor's management offered positive forward guidance, telling investors that earnings are expected to increase across all three segments in the first quarter of 2026. The improvement is anticipated to be driven by higher shipment volumes and improved pricing, according to the company's earnings announcement.
"We expect earnings to improve in the first quarter driven by higher volumes and pricing across all three segments," Nucor stated in its quarterly report. The company did not provide specific numerical guidance for the first quarter.
Nucor's balance sheet remains robust, with $2.7 billion in cash and $406 million remaining under its share repurchase authorization. The strong financial position provides the company flexibility to weather cyclical downturns in the steel market and continue investing in growth initiatives.
The stock's decline on Monday extended Nucor's recent volatility. Shares remain well above their 52-week low of $96.46 but below their year-to-date high of $183.00. The company's market capitalization stands at approximately $41.6 billion.
Nucor, recognized as North America's premier steel recycler, operates an extensive network of mini-mills utilizing electric arc furnace technology. This production model typically provides cost advantages and flexibility compared to traditional integrated steelmakers, particularly during periods of fluctuating demand.
The steel industry has faced headwinds from moderating construction activity and industrial demand, though infrastructure spending and reshoring trends have provided some support. Steel prices have retreated from record levels reached during the pandemic-driven construction boom, compressing margins across the sector.
Analysts maintain a generally positive outlook on Nucor despite the quarterly miss. The company currently holds 13 buy ratings and two hold ratings from covering analysts, with an average price target of $182.38, according to market data. The forward price-to-earnings ratio stands at 15.9, suggesting the stock is pricing in expectations of earnings recovery.
Nucor's dividend yield of 1.22% provides additional income for shareholders, with the next dividend payment scheduled for February 11. The company has a long history of maintaining and increasing its dividend, reflecting confidence in its cash generation capabilities.
Investors will be watching for signs that the anticipated first quarter improvement materializes, as well as commentary on steel demand trends and pricing power heading into the spring construction season. The company's ability to protect margins in a challenging pricing environment will be critical to sustaining earnings momentum throughout 2026.