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U.S. Steel (X) to Report Q3 Earnings: What's in the Offing?
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United States Steel Corporation (X - Free Report) is scheduled to come up with its third-quarter 2022 results after the bell on Oct 27.
The company surpassed the Zacks Consensus Estimate in two of the trailing four quarters, while missed twice. U.S. Steel has a trailing-four quarter negative earnings surprise of 2.06%, on average. It delivered a negative earnings surprise of roughly 0.3% in the last reported quarter. Weaker end-market demand and lower steel prices are likely to have hurt its third-quarter results.
Shares of U.S. Steel are down 8.1% over a year compared with the industry’s decline of 12.7%.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
U.S. Steel, last month, issued its guidance for the third quarter. It envisions adjusted EBITDA of roughly $825 million for the quarter. Third-quarter adjusted earnings per share are projected between $1.90 and $1.95.
The Zacks Consensus Estimate for revenues for U.S. Steel for the third quarter is currently pinned at $4,914 million, indicating a 17.6% year-over-year decline.
The Zacks Consensus Estimate for shipments for the company’s Flat-Rolled unit for the quarter currently stands at 2,224,000 tons, reflecting a 4.5% year-over-year decline. The consensus estimate for average realized price per ton in the unit stands at $1,243, suggesting a 6.2% year-over-year decrease.
The consensus estimate for shipments for the Mini Mill unit is pegged at 584,000 tons, suggesting a 3.9% year-over-year decline. The same for average realized price per ton for the unit stands at $1,011, reflecting a 33.4% year-over-year decline.
The Zacks Consensus Estimate for shipments for the U.S. Steel Europe segment is pegged at 1,031,000 tons, indicating a 3.1% year-over-year decline. The same for average realized price per ton for the unit stands at $1,013, calling for an 11.4% year-over-year decline.
For the Tubular segment, the consensus estimate for shipments is pegged at 144,000 tons, reflecting a 17.1% year-over-year rise. The same for average realized price per ton for the unit stands at $2,813, calling for a 65.3% year-over-year increase.
Some Factors at Play
The company’s third-quarter results are likely to have been affected by softer demand across most end markets and lower selling prices across Flat-Rolled, Mini Mill and U.S. Steel Europe segments.
U.S. Steel, in September, stated that demand across most end-markets was affected, in the third quarter, by accelerated market headwinds. Automotive and appliance end markets continued to witness supply-chain issues. Containers and packaging markets also softened in the quarter. The company expects sequentially lower adjusted EBITDA across its Flat-Rolled, Mini Mill and U.S. Steel Europe segments in the third quarter while the Tubular segment is forecast to witness improved adjusted EBITDA compared with the second quarter.
Volumes in the Flat-Rolled segment is expected to have been hurt by weaker demand in the September quarter. The results in the Europe unit are expected to have been affected by lower selling prices, higher input costs and demand headwinds partly due to the Russia-Ukraine war. The Mini Mill unit is expected to have faced headwinds from lower demand and prices in the quarter. The Tubular segment is expected to have benefited from healthy energy market demand and higher selling prices.
U.S. steel prices have witnessed a significant downward correction. After surging to nearly $1,500 per short ton in April 2022 due to supply concerns stemming from the Russia-Ukraine war, the benchmark hot-rolled coil ("HRC") prices have retreated and fallen below the $800 per short ton level. The downward drift partly reflects shorter lead times. Mills are also negotiating lower prices for new orders. Fears of a recession have also impacted prices.
Lower year-over-year average realized prices are likely to have hurt the company’s revenues and margins in the to-be-reported quarter.
United States Steel Corporation Price and EPS Surprise
Our proven model does not conclusively predict an earnings beat for U.S. Steel this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for U.S. Steel is -0.69%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at $1.92. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: U.S. Steel currently carries a Zacks Rank #4 (Sell).
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Albemarle Corporation (ALB - Free Report) , scheduled to release earnings on Nov 2, has an Earnings ESP of +3.64% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Albemarle’s third-quarter earnings has been revised 1% upward in the past 60 days. The Zacks Consensus Estimate for ALB’s earnings for the quarter is pegged at $6.84.
Koppers Holdings Inc. (KOP - Free Report) , slated to release earnings on Nov 4, has an Earnings ESP of +2.28% and carries a Zacks Rank #2.
The Zacks Consensus Estimate for Koppers’ third-quarter earnings has been revised 2.6% upward in the past 60 days. The consensus estimate for KOP’s earnings for the quarter is currently pegged at $1.17.
ATI Inc. (ATI - Free Report) , scheduled to release earnings on Nov 2, has an Earnings ESP of +1.15%.
The Zacks Consensus Estimate for ATI's earnings for the third quarter is currently pegged at 52 cents. ATI currently carries a Zacks Rank #3.
Image: Bigstock
U.S. Steel (X) to Report Q3 Earnings: What's in the Offing?
United States Steel Corporation (X - Free Report) is scheduled to come up with its third-quarter 2022 results after the bell on Oct 27.
The company surpassed the Zacks Consensus Estimate in two of the trailing four quarters, while missed twice. U.S. Steel has a trailing-four quarter negative earnings surprise of 2.06%, on average. It delivered a negative earnings surprise of roughly 0.3% in the last reported quarter. Weaker end-market demand and lower steel prices are likely to have hurt its third-quarter results.
Shares of U.S. Steel are down 8.1% over a year compared with the industry’s decline of 12.7%.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
U.S. Steel, last month, issued its guidance for the third quarter. It envisions adjusted EBITDA of roughly $825 million for the quarter. Third-quarter adjusted earnings per share are projected between $1.90 and $1.95.
The Zacks Consensus Estimate for revenues for U.S. Steel for the third quarter is currently pinned at $4,914 million, indicating a 17.6% year-over-year decline.
The Zacks Consensus Estimate for shipments for the company’s Flat-Rolled unit for the quarter currently stands at 2,224,000 tons, reflecting a 4.5% year-over-year decline. The consensus estimate for average realized price per ton in the unit stands at $1,243, suggesting a 6.2% year-over-year decrease.
The consensus estimate for shipments for the Mini Mill unit is pegged at 584,000 tons, suggesting a 3.9% year-over-year decline. The same for average realized price per ton for the unit stands at $1,011, reflecting a 33.4% year-over-year decline.
The Zacks Consensus Estimate for shipments for the U.S. Steel Europe segment is pegged at 1,031,000 tons, indicating a 3.1% year-over-year decline. The same for average realized price per ton for the unit stands at $1,013, calling for an 11.4% year-over-year decline.
For the Tubular segment, the consensus estimate for shipments is pegged at 144,000 tons, reflecting a 17.1% year-over-year rise. The same for average realized price per ton for the unit stands at $2,813, calling for a 65.3% year-over-year increase.
Some Factors at Play
The company’s third-quarter results are likely to have been affected by softer demand across most end markets and lower selling prices across Flat-Rolled, Mini Mill and U.S. Steel Europe segments.
U.S. Steel, in September, stated that demand across most end-markets was affected, in the third quarter, by accelerated market headwinds. Automotive and appliance end markets continued to witness supply-chain issues. Containers and packaging markets also softened in the quarter. The company expects sequentially lower adjusted EBITDA across its Flat-Rolled, Mini Mill and U.S. Steel Europe segments in the third quarter while the Tubular segment is forecast to witness improved adjusted EBITDA compared with the second quarter.
Volumes in the Flat-Rolled segment is expected to have been hurt by weaker demand in the September quarter. The results in the Europe unit are expected to have been affected by lower selling prices, higher input costs and demand headwinds partly due to the Russia-Ukraine war. The Mini Mill unit is expected to have faced headwinds from lower demand and prices in the quarter. The Tubular segment is expected to have benefited from healthy energy market demand and higher selling prices.
U.S. steel prices have witnessed a significant downward correction. After surging to nearly $1,500 per short ton in April 2022 due to supply concerns stemming from the Russia-Ukraine war, the benchmark hot-rolled coil ("HRC") prices have retreated and fallen below the $800 per short ton level. The downward drift partly reflects shorter lead times. Mills are also negotiating lower prices for new orders. Fears of a recession have also impacted prices.
Lower year-over-year average realized prices are likely to have hurt the company’s revenues and margins in the to-be-reported quarter.
United States Steel Corporation Price and EPS Surprise
United States Steel Corporation price-eps-surprise | United States Steel Corporation Quote
Zacks Model
Our proven model does not conclusively predict an earnings beat for U.S. Steel this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for U.S. Steel is -0.69%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at $1.92. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: U.S. Steel currently carries a Zacks Rank #4 (Sell).
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Albemarle Corporation (ALB - Free Report) , scheduled to release earnings on Nov 2, has an Earnings ESP of +3.64% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Albemarle’s third-quarter earnings has been revised 1% upward in the past 60 days. The Zacks Consensus Estimate for ALB’s earnings for the quarter is pegged at $6.84.
Koppers Holdings Inc. (KOP - Free Report) , slated to release earnings on Nov 4, has an Earnings ESP of +2.28% and carries a Zacks Rank #2.
The Zacks Consensus Estimate for Koppers’ third-quarter earnings has been revised 2.6% upward in the past 60 days. The consensus estimate for KOP’s earnings for the quarter is currently pegged at $1.17.
ATI Inc. (ATI - Free Report) , scheduled to release earnings on Nov 2, has an Earnings ESP of +1.15%.
The Zacks Consensus Estimate for ATI's earnings for the third quarter is currently pegged at 52 cents. ATI currently carries a Zacks Rank #3.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.