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U.S. Steel Shattered Q1 Estimates: Will It Be Enough?

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May. 3 2019, Published 8:12 a.m. ET

U.S. Steel Corporation

U.S. Steel Corporation (X) released its first-quarter earnings on May 2 after the markets closed. The company 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.

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Earnings beat the estimates

Along with the top line, U.S. Steel Corporation also shattered the bottom-line estimates. The company posted an adjusted EPS of $0.47 in the first quarter. Analysts expected the company to post an adjusted EPS of $0.22 in the first quarter. U.S. Steel Corporation posted an adjusted EPS of $1.82 in the fourth quarter and $0.32 in the first quarter of 2018. Nucor (NUE), AK Steel (AKS), and Cleveland-Cliffs (CLF) also posted better-than-expected earnings in the first quarter. However, AK Steel saw a negative price action on April 30 despite its earnings beat. Read Are AK Steel’s Q1 Earnings Worth the Celebration to learn more.

Coming back to U.S. Steel Corporation, the stock saw a sell-off on May 2. The company announced a $1.2 billion investment in its Mon Valley and Clairton Works plant. However, the stock was trading higher in after-hours trading. Investors seemed pleased with the earnings beat.

Markets are bearish

U.S. Steel Corporation posted an adjusted EBITDA of $285 million in the first quarter, which beat its guidance of $225 million. The earnings beat is a welcome break for U.S. Steel Corporation’s investors. The company missed the consensus estimates in the fourth quarter. In 2019, U.S. Steel Corporation is underperforming its peers. The markets are apprehensive about the company’s competitive position. U.S. Steel Corporation’s expected cash burn is also concerning some analysts. The company’s announcement about pumping another $1.2 billion into its aging plants could strain its balance sheet.

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