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U.S. Steel (X) Beats Earnings and Revenue Estimates in Q4

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United States Steel Corporation (X - Free Report) recorded net income of $49 million or 22 cents per share in fourth-quarter 2020 compared with a loss of $668 million or $3.93 per share in the year-ago quarter.

Barring one-time items, adjusted loss per share was 27 cents compared with a loss of 64 cents in the prior-year quarter. The figure was narrower than the Zacks Consensus Estimate of a loss of 71 cents.

Revenues fell 9% year over year to $2,562 million in the reported quarter. However, it beat the Zacks Consensus Estimate of $2,537.5 million.

The company benefited from its cost-management actions and higher prices in the quarter.

 

United States Steel Corporation Price, Consensus and EPS Surprise

 

United States Steel Corporation Price, Consensus and EPS Surprise

United States Steel Corporation price-consensus-eps-surprise-chart | United States Steel Corporation Quote

 

Segment Highlights

Flat-Rolled: The segment recorded a loss of $73 million in the fourth quarter compared with a loss of $79 million in the year-ago quarter.

Steel shipments in the segment fell roughly 10% year over year to 2,257,000 tons and average realized price per ton in the unit was $731, up around 5% year over year.

U.S. Steel Europe: The segment posted profits of $36 million against a loss of $30 million in the year-ago quarter. Shipments in the segment rose around 11% year over year to 840,000 tons. Average realized price per ton for the unit was $652, up around 5% year over year.

Tubular:  Loss in the segment was $32 million, narrower than a loss of $46 million in the year-ago quarter.

Steel shipments declined roughly 62% year over year to 74,000 tons. Average realized price per ton for the unit was $1,267 down roughly 2% year over year.

FY20 Results

Loss (as reported) for full-year 2020 was $5.92 per share, compared with a loss of $3.67 per share a year ago. Adjusted loss was $4.67 per share for 2020 compared with earnings of 9 cents a year ago.

Revenues dropped around 24% year over year to roughly $9,741 million for the full year.

Financials

Cash and cash equivalents more than doubled year over year to $1,985 million at the end of 2020. Long-term debt rose roughly 29% year over year to $4,695 million.

Outlook

The company noted that its performance continues to strengthen as it entered the new year. It is optimistic that the market will continue to be driven by strong demand, low inventories, and supportive raw material prices.

With the buyout of the remaining stake in Big River Steel, U.S. Steel is well placed to drive significant earnings growth and deliver an unmatched value proposition to its customers.

Price Performance

The company’s shares rallied 101% in the past a year, outperforming the industry’s 22.9% rise.

 

 

Zacks Rank & Key Picks

U.S. Steel currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include Fortescue Metals Group Limited (FSUGY - Free Report) , Impala Platinum Holdings Limited (IMPUY - Free Report) and BHP Group (BHP - Free Report) .

Fortescue has a projected earnings growth rate of 75.5% for the current fiscal. The company’s shares have surged around 129% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Impala Platinum has an expected earnings growth rate of 189.4% for the current fiscal. The company’s shares have rallied around 44% in the past year. It currently carries a Zacks Rank #1.

BHP Group has a projected earnings growth rate of 59.5% for the current fiscal year. The company’s shares have gained around 31% in a year. It currently carries a Zacks Rank #1.

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