Latest Technology and Financial News

We are exited to announce Stock News Desk will be rebranding to IssueWire. It is essential to assure current customers that the new brand is a positive transformation and will not affect the service and commitment that the business has demonstrated thus far

Search Stocks

US Steel Earnings Up Big on Earnings Beat

Oct 29,2014  Company News  Comment: 0

Report A Spam
Facebook Twitter Google LinkedIn StumbleUpon Pinterest Email
Report A Spam

Article(45)
Comments(0)

Philadelphia, Pennsylvania – (StockNewsDesk) – 10/29/2014 —US Steel’s stock opened almost 10% higher after the company topped analysts’ estimates for third-quarter earnings and revenue. The company has continued to reap the benefits of its “Carnegie Way” initiative, designed to cut costs and streamline operations. Due to this successful restructuring, the company has continued to thrive during a rough patch in the global economy and steel industry.

Earnings Beat

US Steel reported a loss of $207 million for the quarter; however, this was because of a onetime charge of $577 million involving restructuring costs such as the winding down of unprofitable operations in Canada and sale of other assets, as dictated by CEO Mario Longhi’s plan.

When the “Carnegie Way” was unveiled to shareholders and Wall Street, the stock actually sold off as there was skepticism whether it would work, thus these charges and costs have already been discounted. The stock’s price action verifies this price discounting as well.

Revenue also came in higher than expectations at $4.59 billion, an increase of 11% from the same quarter last year and above Wall Street consensus expectations of $4.55 billion.

u-s-steel

Stunning Turnaround

US Steel has been climbing the Wall of Worry since it bottomed in mid 2013 in the low teens. Since this nadir, strength in the domestic economy, in combination with increased efficiency and lower costs, has led to a surge in earnings, sales and revenue. One evidence of this success is the company’s loss of $1.79 billion in the same quarter last year on revenue of $4.13 billion.

Since then, revenue has climbed modestly but sales have really taken off, but the most incredible improvement has been in margins, with the company’s cost cutting resulting in operating income of almost $500 million for the quarter. This is the biggest number since the peak of the previous steel cycle, when US Steel’s stock topped out around $150.

Stock Price

US Steel’s stock price was floundering in the low teens during its struggles in 2013. Today, the stock is over $40. Another potent catalyst has been the recovery in the domestic steel market, specifically rolled steel. This has come about as auto sales have continued to grow on a month over month basis, due to the availability of financing for consumers and the record age of the current vehicle fleet. Additionally, auto sales have yet to recover to 2007 levels, indicating there may be room for continued expansion.

Another positive tailwind for US Steel has been the improvement in construction, both commercial and residential. This increased demand has translated into pricing power for US Steel.

Related posts

Share your views and Comment below

Connect with:

Search Stocks

Search Articles

Corn Mail

posted on January 19, 2013 , by Phillip Wilson

LG’s Android G Watch burs…

posted on July 9, 2014 , by Prabir Sinha

Amazon Intensifies Battle…

posted on July 10, 2014 , by James Smith

Deutsche Bank Weakness Ac…

posted on July 11, 2014 , by James Smith

Farnborough Air Show: Boe…

posted on July 12, 2014 , by Greg Henderson

Recent Comments
  • User AvatarCharlesetta Chipman { Would love to perpetually get updated outstanding weblog ! . } – Feb 25, 3:25 PM
  • User AvatarChanda Hinnant { magnificent issues altogether, you simply won a new reader. What could you recommend about your post that you just made a few days ago? Any... } – Feb 25, 1:17 PM
  • User AvatarLenny Strawther { Outstanding post, you have pointed out some superb points, I likewise conceive this is a very good website. } – Feb 25, 12:31 PM
  • User AvatarJennette Lysaght { I have been absent for a while, but now I remember why I used to love this website. Thanks, I will try and check back... } – Feb 25, 11:41 AM
  • User AvatarWilhemina Strube { I just couldn't go away your web site before suggesting that I really enjoyed the standard info a person provide to your guests? Is going... } – Feb 25, 10:30 AM
  • User AvatarGoogle { GREAT POST.THIS IS A GREAT NEWS. } – Feb 24, 7:22 PM
  • NYSE: X,X

    Login

    Connect with:

    Register | Lost your password?