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U.S. Steel Corporation: Its Earnings Beat Might Impress You

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U.S. Steel Corporation in Q2 2018

U.S. Steel Corporation (X) released its second-quarter earnings on August 1 after the market closed. It will hold its earnings conference call today. Nucor (NUE), Cleveland-Cliffs (CLF), and AK Steel (AKS) have already released their earnings.

U.S. Steel Corporation’s Q2 2018 earnings beat analysts’ estimates. ArcelorMittal (MT), which also released its earnings yesterday, posted better-than-expected earnings and gave a rosy outlook.

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Earnings snapshot

U.S. Steel Corporation posted revenues of $3.6 billion for the quarter compared to $3.1 billion in Q2 2017. Its adjusted EBITDA rose from $376 million to $451 million YoY (year-over-year). Its Q2 2018 adjusted EPS was $1.46 compared to $1.07 in Q2 2017. Its better-than-expected earnings were due to conservative earnings estimates and guidance.

Guidance

U.S. Steel Corporation raised its 2019 EBITDA guidance to $1.85–$1.9 billion and expects its third-quarter EBITDA to be $525 million. Its third-quarter EBITDA guidance was lower than what analysts were projecting. It expects its European earnings to fall in 3Q 2018 “due to planned outages that coincide with normal seasonal customer demand patterns.”

Higher guidance looks less than encouraging, given the strength in spot steel prices that are enabling companies such as Nucor to post near-record earnings.

We’ll follow up with a detailed analysis of U.S. Steel Corporation’s earnings after the conference call. Be sure to visit our Basic Materials page for ongoing updates on this industry.

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