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Steel Companies: Their Recent Financial Performance

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Steel companies and their 2Q15 financial performance

The 2Q15 financial performance of most steel companies was better than analysts’ expectations. This was partially due to better-than-expected performance that steel companies managed to deliver in 2Q15. There was also a general sense of pessimism among analysts regarding prospects for the steel industry.

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Highlights of 2Q15 earnings season

  • Nucor’s (NUE) EBITDA (earnings before interest, taxes, depreciation, and taxes) fell more than 10% in 2Q15 compared to the previous quarter, as you can see in the above graph.
  • ArcelorMittal’s (MT) group EBITDA rose ~1.5% in 2Q15. The company was able to aggressively cut down on costs in the quarter. Better-than-expected performance in Europe, which is MT’s biggest market, also contributed positively to its 2Q15 earnings.
  • Steel Dynamics’ 2Q15 adjusted EBITDA fell 13.71% compared to the previous quarter.
  • U.S. Steel Corporation’s (X) adjusted EBITDA plummeted more than 80% in 2Q15. The company’s earnings were negatively hit by the poor operating performance of its Tubular segment. U.S. Steel’s Tubular segment posted a massive loss of $717 per metric ton in 2Q15. Apparently, only U.S. Steel’s Europe segment managed to generate profits in 2Q15.
  • AK Steel (AKS) reported adjusted EBITDA of $47.6 million in 2Q15, down more than 17% from the previous quarter. AK Steel currently forms 3.28% of the SPDR S&P Metals and Mining ETF (XME).

There are some other interesting takeaways from the steel companies’ 2Q15 earnings. We’ll take a look at these in the next part of this series.

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