Back to top

Press Releases

Zacks Industry Outlook Highlights: ArcelorMittal, United States Steel Corp, Nucor Corporation and AK Steel Holding Corporation

MT X NUE AKS

 ZacksTrade Now

 

For Immediate Release

 

Chicago, IL – November 16, 2012 – Today, Zacks Equity Research discusses the Steel Industry, including ArcelorMittal (NYSE: (MT - Analyst Report), United States Steel Corp (NYSE: (X - Analyst Report), Nucor Corporation (NYSE: (NUE - Analyst Report) and AK Steel Holding Corporation (NYSE: (AKS - Analyst Report).

 

Industry: Steel

 

Link: http://www.zacks.com/stock/news/86959/steel-industry-stock-outlook-nov-2012

 

 

The recently reported third quarter results of the steel companies in our coverage – ArcelorMittal (MT - Analyst Report), United States Steel Corp. (X - Analyst Report), Nucor Corporation (NUE - Analyst Report) and AK Steel Holding Corporation (AKS - Analyst Report) paints a gloomy picture. Revenues were constrained across the board due to drop in average steel prices and shipments.

All the steel players have been plagued by weak steel demand, oversupply in the U.S. steel industry and increased steel imports in the domestic market, which have affected steel prices hurting margins in the process. The weak global conditions are a deterrent factor for volumes.

A preview for the upcoming fourth quarter and fiscal 2012 suggest that steel behemoth, ArcelorMittal is anticipating iron ore shipments to increase 10% in 2012 from last year levels. The company, wary of the global economic situation, particularly Europe, has decided to shut down plants, cutting down its planned 2013 capital expenditures. However, the most dramatic announcement was the company’s intent to slash its annual dividend by 73% to 20 cents per share.

United States Steel expects its segments results to remain affected in the fourth quarter based on the assumption of lower average realized prices as well as lower shipments. The Tubular segment is expected to deliver profits, but significantly below the third quarter levels.

The USSE segment is expected to break even while the Flat Rolled segment is expected to be in the red. Softness in Europe as well as in the emerging markets and the economic uncertainty in North America are expected to weigh down its fourth quarter results.

AK Steel has not yet provided any specific guidance for the fourth quarter or fiscal 2012. The company, however, put forward its expectation of posting a loss in the fourth quarter, which includes a non-cash tax expense. Nucor also expects its profits to be reduced in the fourth quarter.

Now, what will be the exact picture in the upcoming results? The U.S. steel market is plagued by oversupply and increased imports. Although Chinese steel production, which was responsible for causing the glut to some extent, has somewhat slowed down, supply in the steel market still overshadows demand.

Increasing domestic imports along with oversupply in the industry due to a ramp up in operations by other steelmakers, is putting pressure on prices. We expect weak pricing, the European debt crisis and its potential global impact to remain an overhang on the steel industry in the quarter. In terms of end markets, the automotive sector holds promise and the impending recovery in the construction market, if permanent, will definitely provide a boost to the steel industry.

The extent of the impact of Hurricane Sandy that hit the East Coast in late October is yet to be assessed by the steel companies. Nucor temporarily shut down its Connecticut rebar and wire rod mill and United States Steel temporarily stalled its Fairless operation in eastern Pennsylvania.

Fourth quarter results might be affected due to the interruption in operations and associated costs/losses. However, in the near future, the steel companies will stand to benefit from the rebuilding activities necessary following the storm.

 

 

About Zacks

 

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros.  In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.

 

 

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

 

Follow us on Twitter:  http://twitter.com/zacksresearch

 

Join us on Facebook:  http://www.facebook.com/ZacksInvestmentResearch

 

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

 

Media Contact
Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

http://www.zacks.com

 

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, brokerage, market making or asset management activities of any securities. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

 

 

 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.00 +3.09%
SANCHEZ ENE… SN 34.18 +2.67%
PANTRY INC PTRY 21.02 +2.09%
INTEL CORP INTC 35.15 +1.88%
PIPER JAFFR… PJC 54.54 +1.70%