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Better Late Than Never: US Steel Q3 Report Meets Expectations

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Better Late Than Never: US Steel Q3 Report Meets Expectations
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United States Steel Corporation (NYSE: X)'s investors had to wait a bit longer Tuesday for the company to release its earnings report, but it was worth the wait. Historically, the steel company releases its results at around 4:18 pm ET. Technical difficulties Tuesday forced the company to delay the release until 5:49 pm ET.

Expectation heading into the earnings print was quite low after AK Steel Holding Corporation (NYSE: AKS)'s poor earnings report sent the stock tumbling lower by more than 20 percent. Also, Axiom's Gordon Johnson said in a research report that U.S. Steel's earnings report would be accompanied with a major EBITDA guidance cut of 25 percent.

As such, some investors were caught off guard when U.S. Steel's earnings report was reported in line with expectations and just a 3-percent reduction to its 2017 EBITDA guidance.

U.S. Steel's reported $342 million EBITDA was in-line with what KeyBanc Capital Markets' Philip Gibbs was modeling and just shy of the Street's $343 million estimate, the analyst wrote. The company benefited from a lower cost in flat-rolled but was offset by weaker results in all other segments. The company guided its 2017 EBITDA lower from $1.11 billion to $1.075 billion due to lower U.S. sheet prices.

The revised guidance also includes $275 million of full-year accounting change benefits from expense capitalization benefits that were detailed in a 10-Q following the second quarter results. This may have been an aspect of the business that "some may have missed."

Finally, U.S. Steel's stock is seeing a relief rally although the core momentum "appears reasonably in line with our existing expectations at first blush."

At publication, shares of U.S. Steel were up 10.62 percent at $28.01.

AK Steel was up 3.27 percent at $4.74, possibly in sympathy.

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Latest Ratings for X

DateFirmActionFromTo
Aug 2018Morgan StanleyDowngradesOverweightUnderweight
Jun 2018CitigroupMaintainsBuyBuy
May 2018UBSMaintainsSellSell

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