U.S. Steel’s 2Q16 earnings
U.S. Steel Corporation (X) had a joyride in 2016 after falling to multiyear lows in January. U.S. Steel’s upward momentum has been driven by multiple factors that have drawn investors to metal and mining companies.
Steel has seen a change in fortunes this year. Steel has actually been the best-performing industrial metal. Flat-rolled steel products in the US have gained ~65% so far in 2016. To put this into context, copper is trading ~5.6% higher compared to last year’s closing price. Aluminum is trading with YTD (year-to-date) gains of 12.5%.
2016 price action
Steel stocks have also followed steel prices and moved to higher price levels. U.S. Steel Corporation and AK Steel (AKS) have led the pack with YTD gains of 171% and 150%, respectively. ArcelorMittal (MT) has also gained 75% YTD. The SPDR S&P Metals and Mining ETF (XME), which invests more than half of its holdings in US-based steel companies, has also returned 88% so far in 2016.
Now, we’re into the 2Q16 earnings season. Nucor (NUE) plans to release its 2Q16 earnings on July 21. U.S. Steel Corporation and AK Steel are expected to release their 2Q16 earnings on July 26. It will be crucial for steel companies to justify their price movements with solid 2Q16 earnings.
In this series, we’ll explore what Wall Street expects from U.S. Steel’s 2Q16 earnings. We’ll also look at the key points that U.S. Steel investors should watch for in the company’s 2Q16 earnings conference call. Let’s start by analyzing what Wall Street expects for U.S. Steel’s revenues in 2Q16.