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US Steel Companies’ Q1 Earnings: What to Expect?

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  • Steel Dynamics (NASDAQ:STLD) will likely report its first-quarter earnings after the close of markets today. Other leading US steel companies’ earnings would follow in the coming weeks.
  • The earnings season comes amid the COVID-19 pandemic. What should investors expect from US steel companies’ first-quarter earnings?
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US steel companies’ Q1 earnings

The first-quarter earnings season for US steel companies starts today with Steel Dynamics’ earnings release. Nucor (NYSE:NUE) and U.S. Steel Corporation (NYSE:X) will likely release their first-quarter earnings on April 28 and April 30, respectively. The earnings season will be watched for the earnings data and what companies have to say about the outlook amid the pandemic. When the companies provided their first-quarter earnings guidance in the middle of March, they hadn’t seen much impact from COVID-19. However, the situation has changed in the past month.

Steel Dynamics’ Q1 earnings release

Last month, Steel Dynamics said that it expects to post an EPS of $0.83–0.87 in the first quarter. In comparison, the company posted an EPS of $0.62 in the fourth quarter of 2019 and $0.91 in the first quarter of 2019. However, the guidance was issued on March 18. Analysts expect the company to post an EPS of $0.79 in the first quarter and $0.31 in the second quarter. Meanwhile, analysts expect Nucor’s first-quarter EPS to be $0.95, which is at the lower end of the company’s guidance.

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U.S. Steel’s Q1 earnings release

U.S. Steel stock has fallen amid the COVID-19 pandemic. The stock fell to its all-time lows last month. The stock fell in 2018 and 2019 as well. During the fourth-quarter earnings call, the company said that the first quarter would be a trough for its earnings. However, the pandemic has changed the scene. The company’s second-quarter earnings might be even worse than its first-quarter earnings.

Last month, U.S. Steel said that it expects to post an adjusted EBITDA of $30 million and an adjusted loss per share of $.80 in the first quarter. The analysts polled by Thomson Reuters expect the company to post an adjusted loss per share of $0.86 in the first quarter.

What else to watch in the Q1 earnings release

During the companies’ first-quarter earnings calls, it will be interesting to see their views on their ongoing capex plans. So far, only U.S. Steel has announced a cut in its capex plan. The companies might also offer insight into the end-demand scenario. The automotive sector has shut operations, while some states have banned construction activities. US steel production has fallen sharply over the last few weeks amid tepid demand.

Companies might also share their views on the pricing environment. Domestic prices have fallen over the last few weeks. Read Would US Steel Prices Fall More amid COVID-19? to learn more.

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