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Key Takeaways from U.S. Steel’s 4Q16 Earnings and Conference Call

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U.S. Steel’s 4Q16 earnings

U.S. Steel (X) released its 4Q16 financial results on January 31 after the market closed, and it held its earnings conference call on February 1. The company reported adjusted net income of $47 million, which translates into adjusted EPS (earnings per share) of $0.27. To put this in context, consider that U.S. Steel generated adjusted EPS of $0.40 in 3Q16 and adjusted loss per share of $0.23 in 4Q15.

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4Q16 earnings season

It’s been a subdued earnings season so far for steel investors (XME). Both Steel Dynamics (STLD) and AK Steel (AKS) saw negative price action after their respective 4Q16 earnings releases. While Steel Dynamics missed consensus earnings estimates, AK Steel saw selling pressure on a tepid outlook, despite beating consensus earnings estimates.

Nucor (NUE), which also released its 4Q16 earnings on January 31, also saw selling pressure despite posting better-than-expected revenues and profits. Prior to that, metal stocks were flying high on Donald Trump’s election win. Trump’s presidency helped revive market sentiment and boosted steel stocks. The upward price action was a welcome break for steel investors. They saw their investment value erode in previous years. However, we should remember that in the medium to long term, earnings are a key driver of stock prices.

Series overview

In this series, we’ll analyze U.S. Steel’s 4Q16 earnings. We’ll explore what drove U.S. Steel’s 4Q16 financial performance and 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 4Q16 revenue.

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