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U.S. Steel’s 4Q15 Earnings Release Sparked a Selling Spree

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U.S. Steel’s 4Q15 earnings

U.S. Steel (X) released its 4Q15 financial results on January 26 after the market closed and held the earnings conference call the next day. U.S. Steel’s 4Q15 earnings release sparked a selling spree on Wall Street, and the stock plummeted more than 14% on January 27. Steel Dynamics (STLD) and AK Steel (AKS), which reported their 4Q15 earnings on January 25 and January 26, respectively, saw upwards price action on better-than-expected earnings.

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Better-than-expected earnings

Interestingly, U.S. Steel saw negative price action after its 4Q15 earnings release despite posting better-than-expected earnings. The company posted an adjusted loss per share of $0.23, which beat consensus estimates of an $0.87 per share loss. U.S. Steel managed to post better-than-expected earnings in 4Q15 after missing analyst estimates for three consecutive quarters, as can be seen in the graph above. However, as we noted in our pre-earnings analysis, U.S. Steel’s 4Q15 earnings release was more focused on the 2016 outlook.

Series overview

In this series, we’ll explore U.S. Steel’s 4Q15 earnings in detail. We’ll discuss what factors could drive U.S. Steel’s earnings in the coming quarters. We’ll also cover the key points from the company’s 4Q15 earnings conference call. These should help you understand U.S. Steel’s position in what is shaping up to be an extremely challenging year.

Investors who want to diversify the risk of investing in a single security can also consider ETFs for their investment portfolios. The Materials Select Sector SPDR ETF (XLB) is an alternative way to play the materials space. Currently, Nucor (NUE) forms 2.8% of XLB’s portfolio.

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