Tuesday, January 25, 2011

U.S. Steel Corp. (NYSE: X): Q4 Earnings Preview 2010

United States Steel Corp. (NYSE: X), the largest U.S.- based steelmaker, is scheduled to release fourth-quarter earnings before the market open on Tuesday, January 25, 2011. Analysts, on average, expect the company to post a loss of $1.12 per share on revenue of $4.22 billion. In the year ago quarter, the company posted a loss of $1.83 per share on revenue of $3.35 billion.

United States Steel Corporation, through its subsidiaries, engages in the production and sale of steel products primarily in North America and Europe.

In the preceding third quarter, the Pittsburgh, Pennsylvania-based company's net loss was $51 million, or 35 cents a share, compared to a loss of $303 million, or $2.11 a share, in the year-earlier quarter. Revenue increased to $4.5 billion from $2.82 billion. Analysts, on average, expected the company to report earnings of 23 cents per share on revenue of $4.53 billion.

At its last earnings call in October, the company said that it expects fourth-quarter results for Flat-rolled to be in line with the third quarter, as reduced spending for facility repair and maintenance and the absence of operating inefficiencies at Gary Works due to the structural failure would be offset by decreased average realized prices and lower shipments and production volumes. Fourth-quarter results for USSE are expected to be comparable to the third quarter, but Tubular segment is anticipated to remain profitable in the fourth quarter, but expect lower results as compared to the third quarter. However, the company said that demand pattern in North America and Europe still remain uncertain. Shipments, prices and production volumes are expected to be weak in the fourth quarter.

Steel demand and production have improved nicely in the past year due to increased government support and more balanced demand. The rebound in demand has been largely attributed to -- at least in the US -- stronger auto and non-residential construction sectors. China posted a significant surge in steel imports last month; however stricter measures may reduce the nation's demand going forward. Epochal floods have inundated the coal mines of Queensland, Australia, which supplies nearly 70% of the planet's coking coal, used to smelt iron ore in blast furnaces, and therefore a crucial steel ingredient. Meanwhile, a run-up in raw materials costs has helped steel mills press home higher prices with their biggest customers, especially auto makers and distribution centers.

In terms of stock performance, U.S. Steel shares have lost nearly 6 percent over the past year.

Full Disclosure: None.
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