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Key for Investors: Analyzing Steel Dynamics 2Q15 Earnings

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Part 7
Key for Investors: Analyzing Steel Dynamics 2Q15 Earnings PART 7 OF 7

What Can Investors Expect from Steel Companies’ 2Q15 Earnings?

Steel companies’ 2Q15 earnings

In this series, we’ve analyzed Steel Dynamics’ (STLD) 2Q15 earnings. Now, we’ll explore what investors can expect from other steel companies’ 2Q15 earnings. Now, Nucor (NUE) is the largest US steel company—in terms of installed capacity. It released its 2Q15 earnings on July 23.

U.S. Steel (X) is expected to release its 2Q15 earnings on July 28. AK Steel’s (AKS) earnings are expected on July 29. Currently, AK Steel forms ~2.70% of the SPDR S&P Metals and Mining ETF (XME).

What Can Investors Expect from Steel Companies’ 2Q15 Earnings?

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U.S. Steel is expected to post a loss

AK Steel and U.S. Steel are expected to post a loss in 2Q15. This can be seen in the above chart. However, Nucor posted an EPS (earnings per share) of $0.39 in 2Q15. It has a variable cost structure and produces most of its steel in electric arc furnaces. This helps Nucor post profits across industry downtrends as well.

U.S. Steel’s earnings have been hit because its tubular segment hasn’t been doing well. Its tubular segment supplies the energy sector. A cocktail of lower demand and a high level of inventory—caused by a surge in imports last year—could weigh heavy on U.S. Steel’s 2Q earnings.

ArcelorMittal’s 2Q15 earnings

ArcelorMittal (MT) is also expected to post a loss in 2Q15. Its mining segment has posted an operating loss for two consecutive quarters. Falling iron ore prices have severely impacted the profitability of its mining operations. Iron ore prices have been falling in 2Q15 as well. This would continue to put pressure on ArcelorMittal’s profitability.

For more updates on this industry, visit Market Realist’s Steel page.

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