First-quarter revenues

U.S. Steel Corporation (X) is scheduled to release its first-quarter earnings on May 2. In this part, we’ll discuss analysts’ expectations for the company’s first-quarter revenues. For steel companies, the revenues are a function of steel shipments and average steel selling prices.

U.S. Steel’s Q1 Revenues: Analysts’ Expectations

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The analysts polled by Thomson Reuters expect U.S. Steel Corporation to post revenues of $3.3 billion in the first quarter. The company posted revenues of $3.7 billion in the fourth quarter and $3.1 billion in the first quarter of 2018. Analysts expect U.S. Steel Corporation’s first-quarter revenues to fall 9.4% sequentially. Most of the other steel companies that have reported their earnings saw a sequential fall in their first-quarter revenues. Nucor (NUE) and Steel Dynamics (STLD) posted sequential falls of 3.2% and 2.7%, respectively, in their first-quarter revenues. However, AK Steel (AKS) reported a marginal rise in its first-quarter revenues.

Steel prices

US steel prices fell sharply in the fourth quarter. Usually, there’s a lag impact on steel companies’ spot shipments. The steel price deterioration that we saw in the fourth quarter will likely be reflected in steel companies’ first-quarter shipments. Nucor and Steel Dynamics reported sequentially lower average steel selling prices in the first quarter amid lower spot steel prices.

Lower spot steel prices should more than offset higher resets in annual fixed contracts. From a shipment perspective, the first quarter is typically seasonally weak for U.S. Steel Corporation. The dual impact of lower sequential shipments and average selling prices might weigh heavily on the company’s first-quarter revenues.

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