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U.S. Steel: Q1 Earnings Might Revive Investors’ Sentiments

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U.S. Steel Corporation

U.S. Steel Corporation (X) is scheduled to release its first-quarter earnings on May 2 after the markets close. The company will hold its earnings call the next day. U.S. Steel Corporation’s earnings are coming towards the end of the first-quarter earnings season. Most US-based steel and iron ore companies have already released their results.

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Steel Dynamics (STLD) was the first major steel company to release its earnings. The company’s earnings were lower than analysts’ expectations. However, Nucor (NUE) and Cleveland-Cliffs (CLF) posted better-than-expected earnings. AK Steel (AKS) posted its first-quarter earnings on April 29. AK Steel posted better-than-expected earnings but missed the revenue estimates.

Price action

Looking at the price action, U.S. Steel Corporation is underperforming its peers this year. While most US steel stocks are still in the green for the year despite last month’s sell-off, U.S. Steel Corporation is negative for the year. Overall, 2018 wasn’t any better for U.S. Steel Corporation. The stock saw a negative price action of 48% despite the Section 232 tariffs.

Last month, we saw brokerages turn bearish on U.S. Steel Corporation amid overcapacity concerns. The company’s weak competitive position and expected cash burn in 2019 and 2020 concerned investors. U.S. Steel Corporation’s first-quarter earnings would provide management an opportunity to address some of the concerns and revive investors’ sentiments. Looking at analysts’ estimates, U.S. Steel Corporation is expected to post an adjusted EPS of $0.22 in the first quarter. The company posted an adjusted EPS of $1.82 in the fourth quarter and $0.32 in the first quarter of 2018.

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