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U.S. Steel Corporation’s 2018 Guidance

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U.S. Steel Corporation’s 2018 guidance

U.S. Steel Corporation (X) and Cleveland-Cliffs (CLF) provide their annual earnings guidance during the quarterly earnings calls. AK Steel (AKS) provides a broad qualitative guidance during the earnings calls. Steel Dynamics (STLD) and Nucor (NUE) usually provide their quarterly earnings guidance two weeks before the quarter ends. In this part, we’ll look at U.S. Steel Corporation’s 2018 guidance.

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Higher guidance

According to U.S. Steel Corporation, “If market conditions remain at their January 24, 2018 levels, we expect 2018 net earnings of approximately $685 million, or $3.88 per diluted share, and EBITDA (earnings before interest, tax, depreciation, and amortization) of approximately $1.5 billion.” Notably, U.S. Steel Corporations’s 2018 guidance was higher than analysts’ estimates.

Looking at various segments, U.S. Steel Corporation expects its Flat-Rolled segment to generate an adjusted EBITDA of $1 billion. The Europe segment is expected to post an EBITDA of $400 million. The Tubular segment and other businesses are expected to contribute $50 million each to U.S. Steel Corporation’s 2018 EBITDA.

Outlook

Currently, the undertone in US steel markets remains bullish. We’ve already seen spot steel prices rise this year from the levels we saw at the end of 2017. There has been another round of price hikes by US steel companies.

US steel mills might get respite from President Trump this year. The Section 232 investigation findings have been submitted to President Trump. He has to decide on any action by mid-April. Along with trade actions, any infrastructure plans by the Trump Administration could lift US steel prices.

Read Have US Steel Stocks Front-Loaded Their 2018 Gains? to analyze the different factors that could drive US steel stocks this year.

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