How U.S. Steel Pulled off Better-Than-Expected Earnings in 2Q16



2Q16 earnings

U.S. Steel (X) released its 2Q16 financial results on July 26 after the market closed, and it held its earnings conference call on July 27. The company reported a net loss of $46 million, which translates into a per-share loss of $0.32. U.S. Steel had posted an adjusted loss per share of $0.79 and $2.15 in 2Q15 and 1Q16, respectively.

U.S. Steel’s 2Q16 earnings came in better than what analysts were expecting. According to consensus estimates compiled by Bloomberg, analysts expected U.S. Steel to post an adjusted loss per share of $0.50 in 2Q16. The graph above shows U.S. Steel’s actual EPS (earnings per share) plotted against the consensus estimates.

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Price action

Markets (MDY) gave a thumbs up to U.S. Steel’s 2Q16 earnings, sending its stock up by ~11% after the earnings release. AK Steel (AKS) also saw upward price action of more than 14% post its 2Q16 earnings release. However, Nucor (NUE) saw negative price action after the company released its 2Q16 financial results.

Markets will next look forward to ArcelorMittal’s (MT) 2Q16 financial results, which are expected on July 29. You can read ArcelorMittal’s 2Q16 Earnings: What’s the Word on Wall Street? to explore what analysts expect from MT’s 2Q16 earnings.

Series overview

In this series, we’ll analyze U.S. Steel’s 2Q16 earnings. We’ll explore what drove U.S. Steel’s 2Q16 financial performance, and we’ll also discuss the key takeaways from the company’s earnings conference call. We’ll also analyze the business outlook and guidance provided by U.S. Steel.

Let’s begin by looking at U.S. Steel’s 2Q16 revenues.


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