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U.S. Steel (X) Sees Strong Growth in Q2 on Higher Prices
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United States Steel Corporation (X - Free Report) expects strong growth in the second quarter of 2023. With adjusted earnings per share projected in the range of $1.81-$1.86, indicating an increase from the previous quarter's 77 cents, the company is poised for a solid second quarter. However, the company’s guidance is lower than earnings of $3.86 per share reported in the second quarter of the previous year.
The company’s projected adjusted EBITDA of $775 million for the second quarter highlights the positive impact of factors such as the company's diverse order book, higher selling prices and the company’s ongoing efforts to improve operational metrics and cost performance across all segments. The strong performance expected in the second quarter is anticipated to contribute to a quarter-ending cash position of approximately $3 billion.
The company also provided an update on its stockholder returns, stating that it anticipates completing approximately $75 million of stock repurchases in the second quarter. This would bring the total repurchased shares to around 17% of shares outstanding since December 2021, amounting to over $1.1 billion returned to stockholders.
The Flat-Rolled segment is projected to achieve higher adjusted EBITDA in comparison to the first quarter. This growth is supported by factors such as diverse end-market exposure, strategic market growth and increased realization of higher steel prices. The Mini Mill segment is also anticipated to experience higher adjusted EBITDA, benefiting from elevated average selling prices.
Additionally, the European segment is expected to return to positive adjusted EBITDA. This positive outcome can be attributed to commercial tailwinds, lower energy costs and increased efficiencies resulting from running all three blast furnaces. However, the Tubular segment's adjusted EBITDA is forecast to remain strong. However, it is expected to be lower than the first quarter due to lower spot average selling prices and the presence of high import levels.
The company also highlighted its commitment to executing its strategy and emphasized the upcoming non-grain-oriented (NGO) electrical steel line at Big River Steel in the third quarter of 2023. This development is expected to bolster domestic supply chains and reintroduce advanced manufacturing to the United States, with a focus on serving automotive customers with state-of-the-art and sustainable electrical steel.
The company has gained 17.7% in the past year, compared with the industry's 29% rise in the same period.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
U.S. Steel currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for L.B. Foster’s current-year earnings is pegged at 53 cents per share, indicating year-over-year growth of 112.5%. The company’s shares have gained around 6.7% over the past year. FSTR beat the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 140.5%, on average.
Gold Fieldscurrently carries a Zacks Rank #1.The Zacks Consensus Estimate for GFI’s current-year earnings has been revised 4% upward in the past 60 days. The consensus estimate for current-year earnings for GFI is currently pegged at $1.05, implying year-over-year growth of 8.3%. Gold Fields’shares have rallied roughly 51% in the past year.
The Zacks Consensus Estimate for Linde’s current-year earnings has been revised 4.4% upward in the past 60 days. LIN beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 6.9%. The company’s shares have gained 29.1% in the past year.
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U.S. Steel (X) Sees Strong Growth in Q2 on Higher Prices
United States Steel Corporation (X - Free Report) expects strong growth in the second quarter of 2023. With adjusted earnings per share projected in the range of $1.81-$1.86, indicating an increase from the previous quarter's 77 cents, the company is poised for a solid second quarter. However, the company’s guidance is lower than earnings of $3.86 per share reported in the second quarter of the previous year.
The company’s projected adjusted EBITDA of $775 million for the second quarter highlights the positive impact of factors such as the company's diverse order book, higher selling prices and the company’s ongoing efforts to improve operational metrics and cost performance across all segments. The strong performance expected in the second quarter is anticipated to contribute to a quarter-ending cash position of approximately $3 billion.
The company also provided an update on its stockholder returns, stating that it anticipates completing approximately $75 million of stock repurchases in the second quarter. This would bring the total repurchased shares to around 17% of shares outstanding since December 2021, amounting to over $1.1 billion returned to stockholders.
The Flat-Rolled segment is projected to achieve higher adjusted EBITDA in comparison to the first quarter. This growth is supported by factors such as diverse end-market exposure, strategic market growth and increased realization of higher steel prices. The Mini Mill segment is also anticipated to experience higher adjusted EBITDA, benefiting from elevated average selling prices.
Additionally, the European segment is expected to return to positive adjusted EBITDA. This positive outcome can be attributed to commercial tailwinds, lower energy costs and increased efficiencies resulting from running all three blast furnaces. However, the Tubular segment's adjusted EBITDA is forecast to remain strong. However, it is expected to be lower than the first quarter due to lower spot average selling prices and the presence of high import levels.
The company also highlighted its commitment to executing its strategy and emphasized the upcoming non-grain-oriented (NGO) electrical steel line at Big River Steel in the third quarter of 2023. This development is expected to bolster domestic supply chains and reintroduce advanced manufacturing to the United States, with a focus on serving automotive customers with state-of-the-art and sustainable electrical steel.
The company has gained 17.7% in the past year, compared with the industry's 29% rise in the same period.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
U.S. Steel currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include L.B. Foster Company (FSTR - Free Report) , carrying a Zacks Rank #1 (Strong Buy) and Gold Fields Limited (GFI - Free Report) , and Linde Plc (LIN - Free Report) , carrying a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for L.B. Foster’s current-year earnings is pegged at 53 cents per share, indicating year-over-year growth of 112.5%. The company’s shares have gained around 6.7% over the past year. FSTR beat the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 140.5%, on average.
Gold Fieldscurrently carries a Zacks Rank #1.The Zacks Consensus Estimate for GFI’s current-year earnings has been revised 4% upward in the past 60 days. The consensus estimate for current-year earnings for GFI is currently pegged at $1.05, implying year-over-year growth of 8.3%. Gold Fields’shares have rallied roughly 51% in the past year.
The Zacks Consensus Estimate for Linde’s current-year earnings has been revised 4.4% upward in the past 60 days. LIN beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 6.9%. The company’s shares have gained 29.1% in the past year.