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Can U.S. Steel’s 2018 Guidance Lift Its Sagging Stock Price?

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Apr. 26 2018, Updated 7:30 a.m. ET

U.S. Steel’s 2018 guidance

In the previous parts of this series, we’ve looked at U.S. Steel Corporation’s (X) 1Q18 earnings estimates. In this article, we’ll look at the key updates that markets might watch for on the company’s earnings call.

U.S. Steel’s 2018 EBITDA (earnings before interest, tax, depreciation, and amortization) guidance is closely followed by analysts during the company’s earnings calls. U.S. Steel and Cleveland-Cliffs (CLF) provide their annual guidance during their quarterly earnings calls. AK Steel (AKS) gives qualitative guidance during its earnings calls, while Nucor (NUE) and Steel Dynamics (STLD) provide their earnings guidance typically 15 days before a quarter ends.

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Guidance revised last month

U.S. Steel raised its annual guidance by $200 million to $1.7 billion last month, as US steel prices rose sharply since the company gave its guidance during the 4Q17 earnings call. However, the company’s revised guidance wasn’t received well by markets. The stock saw selling pressure even after raising its guidance. But it’s worth noting that while revising its 2018 guidance, U.S. Steel didn’t provide granularity—especially on the average steel prices it assumed in arriving at the guidance.

US steel prices are up sharply this year. Markets expected much higher EBITDA guidance from U.S. Steel. The company’s 2018 guidance, and the assumptions used in that guidance, should be very important during U.S. Steel’s 1Q18 earnings call.

In the next and final part of this series, we’ll see how markets are valuing U.S. Steel ahead of its 1Q18 earnings release.

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