US steel stocks recover as earnings rise, as industry strengthens
US Steel (X) topped fourth-quarter earnings and revenue estimates as of late Thursday. However, the company is the latest steel stock in recent weeks to see earnings fall from a year ago. US Steel stocks fell in regular trading on Thursday, but rose on Friday.
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US Steel Stocks: Earnings
estimate: Analysts expect earnings to drop 85% to 56 cents per share. Adjusted earnings are expected to be 54 cents per share in Q4. Wall Street forecast revenue also fell 28% to $4.03 billion. For the full year, analysts expect EPS to drop 38% to $9.16 while revenue is expected to grow 2% to $20.78 billion.
Result: United States Steel reported a 76% drop in earnings to 87 cents per share. Revenue fell 23% to $4.34 billion. For the full year, revenue grew 4% to $21.06 billion. Earnings fell 26% to $9.95 per share.
Chief Executive Officer David Burritt attributed the outstanding Q4 earnings results to the combined efforts of the company’s domestic steel production and the tubular steel segment, commonly used in vehicles and machinery. industrial hook.
Burritt said U.S. Steel is “well-positioned for 2023” and that it has returned about $900 million to shareholders in 2022.
Status of the steel industry
Earnings from Pittsburgh-based US Steel come amid growing expectations for steelmakers. Infrastructure spending, related to last year’s Inflation Reduction Act and other laws, is pouring billions of dollars into steel-hungry projects.
But despite the tariffs that still protect American-made steel, steelmakers are still treating the wounds caused by the pandemic. Nucor (ARE NOT), on January 26, beat earnings and revenue estimates, even as EPS fell 36% and revenue fell 16%. This follows Steel momentum (STLD) beat Q4 views while earnings and sales fell by 24% and 9%, respectively.
Meanwhile, on January 9, steel stocks Commercial metal company (CMC) delivered better-than-expected EPS and revenue with earnings growing 38% to $2.24 per share in Q1 2023.
Cleveland-Scale (CLF) will report fourth-quarter earnings on Feb. 14. Wall Street is forecasting a loss of 22 cents per share, down from a gain of $1.69 per share a year ago. Revenue is forecast to drop 2% to $5.24 billion.
US Steel Stock
US Steel stock is up 6% during the period market trading Friday. Shares fell 0.4% to 29.23 on Thursday. Shares have gained more than 61% since the end of September, including a 13.7% gain in January.
The stock is above the left midpoint during the 10-month consolidation. That means it can form a valid handlinge at any given time.
In the third quarter, U.S. Steel sales and earnings fell, with revenue falling 13% to $5.2 billion while earnings per share of $1.95 marked a 66% decline. .
US Steel shares ranked 9th among steel stocks in Steel-Manufacturer industry group. The group posted the fourth strongest gain among industries in the past three months. It is currently ranked 6th out of 197 groups tracked by IBD.
Stock has 73 Overall rating out of 99. Stocks with a Relative Strength Rating of 92, proprietary Check IBD Stocks measure of stock price movement. The EPS rating is 21.
US Steel Stocks: Plot
The Covid-19 pandemic has disrupted global supply chains in many industries, including steel. As much of the world was in crisis, demand for steel plummeted. Steel demand began to increase by the end of 2020.
In the first half of 2022, steel industry stocks have strong quarterly business results, making industry executives optimistic about both product demand and industry outlook. However, analysts consider the market to be oversupplied, indicating very low pricing power.
As a result, many steel industry stocks announced lackluster Q3 financial statements. lead to group sell-off.
US Steel had a six-quarter losing streak between the third quarter of 2019 and the fourth quarter of 2020. Since then, steel stock has had seven consecutive quarters of gains.
In 2021, US steel prices skyrocketed to an all-time high, surpassing $1,900/short ton in August 2021. Prices fell into a lull in early 2022. After that, rolled coil prices. heating (HRC) increases to about 1,500 USD/short ton in 2021. April after Russia invaded Ukraine. Before the pandemic, the price of HRC was nearly 500 USD/ton.
On Thursday, benchmark HRC steel futures rose about 1% to $795 a short ton. China rebar futures traded at around $600/ton on Thursday.
By 2022, shares of US Steel have risen about 10% in a year of ups and downs in steel stocks.
Please follow Kit Norton on Twitter @KitNorton for more insurance.
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