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U.S. Steel Corporation Stock Went from Boom to Bust in a Week

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May. 10 2019, Published 7:07 a.m. ET

U.S. Steel Corporation

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U.S. Steel Corporation reported revenues of $3.5 billion in the first quarter. The analysts polled by Thomson Reuters expected the company to post revenues of $3.3 billion. U.S. Steel Corporation posted an adjusted EPS of $0.47 in the first quarter. Analysts expected the company to post an adjusted EPS of $0.22. U.S. Steel Corporation generated an adjusted EBITDA of $285 million in the first quarter, which was much higher than its guidance of $225 million.

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Impressive earnings

U.S. Steel Corporation’s shipments and average selling price progression also looked encouraging. The company’s earnings were decent despite the headwinds in its Europe operations. Seaborne iron ore prices rose in the first quarter, which hurt U.S. Steel Corporation’s Europe operations. While the company is self-reliant in its iron ore needs in US operations, it buys iron ore from Europe. While iron ore prices have risen, there hasn’t been a commensurate rise in steel prices. Steel prices had a negative impact on steel companies’ margins that source iron ore from third parties.

U.S. Steel Corporation rose 17.3% on May 3. Investors reacted to the company’s earnings beat. U.S. Steel Corporation was getting too cheap to ignore. The company’s earnings beat gave bulls the charge. This week, U.S. Steel Corporation has come under pressure and pared most of last week’s gains.

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