Nucor Corporation (NYSE: NUE) experienced a significant selloff on Friday, with shares dropping 6.32% to close at $248.38. The decline came after the steelmaker issued third-quarter earnings guidance that fell short of Wall Street's expectations, triggering a broader pullback in steel stocks.
The company's forecast of $5.55 to $5.65 per diluted share for the third quarter, with a midpoint of $5.60, trails the consensus estimate of $5.99 by 6.5%. While the miss is modest, it comes amid concerns about cost pressures and the absence of one-time benefits that boosted the previous quarter.
Trading volume surged to 3.19 million shares, more than three times the average of the prior ten sessions, indicating that investors took the guidance shortfall seriously. The selloff erased $16.76 per share in market value, reflecting a sharp repricing of expectations.
The weakness was not isolated to Nucor. Steel Dynamics (NASDAQ: STLD) fell 4.11%, Commercial Metals (NYSE: CMC) dropped 3.87%, and Cleveland-Cliffs (NYSE: CLF) declined 2.04%. However, Nucor's underperformance relative to its peers suggests a company-specific reset in expectations.
Nucor anticipates higher earnings from its steel mills, driven by firmer prices and steady volumes, and its steel products segment is expected to benefit from improved pricing and demand. However, raw materials earnings are projected to decline due to weaker prices and shipments.
The key challenge lies in cost dynamics. In the second quarter, Nucor received $130 million in cash refunds related to earlier raw material purchases, a benefit that will not recur in the third quarter. Additionally, a $61 million pretax gain from its investment in Helion will also be absent, placing greater pressure on operational performance.
Despite the shortfall, the guidance still represents a significant improvement year-over-year. The midpoint of $5.60 is 112.9% higher than the $2.63 reported in the third quarter of 2025 and 11.1% above the second quarter's reported profit of $5.04. Even when adjusted for one-time items, the midpoint is 15.7% above the adjusted second-quarter figure.
Analysts have responded with mixed actions. While four of five firms maintain Buy ratings, three have lowered their price targets. Freedom Capital Markets cut its target from $305 to $285, Goldman Sachs from $304 to $302, and Wells Fargo from $285 to $280. J.P. Morgan and BMO Capital reiterated their targets at $308 and $295, respectively. The average target implies upside of approximately 19% from Friday's close.
Nucor's balance sheet provides some cushion. As of its July investor presentation, the company held $2.69 billion in cash against $7.10 billion in debt, with net debt at 0.8 times trailing EBITDA. The company also repurchased 2.03 million shares during the quarter at an average price of $247.04, just 0.5% below Friday's close, signaling management's confidence in the stock.
Looking ahead, Nucor's third quarter ends on October 3, with results scheduled for release after the market close on October 26, followed by a conference call on October 27. The critical question will be whether pricing gains can offset higher conversion costs without the benefit of one-time items. Investors will be watching closely to see if the company can deliver on its guidance and maintain momentum in a challenging steel market.
