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Can U.S. Steel’s 4Q15 Earnings Help Its Battered Stock?


Jan. 22 2016, Updated 10:06 a.m. ET

U.S. Steel’s 4Q15 earnings

Previously, we’ve looked at the analyst consensus estimates for 4Q15 earnings of AK Steel (AKS) and Steel Dynamics (STLD). In this part of the series, we’ll see what analysts are projecting for U.S. Steel Corporation’s (X) 4Q15 earnings.

U.S. Steel has seen a downward price movement of 15% so far in 2016. This comes after a dismal 2015 performance when it saw its market capital erode by almost 70%.

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Earnings estimate

According to the data compiled by Bloomberg, analysts expect U.S. Steel to post a loss per share of $0.87 in 4Q15. In contrast, the company had posted an adjusted EPS (earnings per share) of $1.82 in the corresponding quarter last year. In 3Q15, U.S Steel posted worse-than-expected earnings that sent its stock down by ~15%. U.S. Steel’s earnings have missed analyst estimates for the last three consecutive quarters.

There might not be any respite for U.S. Steel investors in the company’s 4Q15 earnings. Falling steel demand from the energy sector and pricing pressure in the flat-rolled market could pressure U.S. Steel’s 4Q15 earnings.


In its most recent guidance, U.S. Steel stated that it expects to post an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $225 million in 2015. In the first nine months of 2015, U.S. Steel generated an adjusted EBITDA of $215 million.

Looking at the company’s 2015 guidance, U.S. Steel expects to generate an EBITDA of $10 million in 4Q15. Wall Street analysts expect U.S. Steel to post an EBITDA of $17 million in 4Q15. However, analysts have pessimistic estimates for U.S. Steel’s 4Q15 cash flows. We’ll discuss this in more detail in the next part of the series.

You can also consider the Materials Select Sector SPDR ETF (XLB) to get a diversified exposure to the materials sector. Nucor (NUE) forms 2.7 % of XLB’s holdings.


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