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Analyst: US Steel's 1Q could beat St. expectations

PITTSBURGH (AP) -- United States Steel Corp. may deliver better earnings than analysts expect in the current quarter, despite lower prices for steel, an analyst predicted Wednesday.

THE OPINION: Dahlman Rose & Co. analyst Anthony B. Rizzuto Jr. said that he believes stronger steel shipments to automobile manufacturers will help U.S. Steel offset the lower market price for steel in the U.S. He also said that higher oil prices may boost the energy industry's need for U.S. Steel's pipes and tubes as oil companies drill more, and that the decline in steel prices may stabilize soon.

In a research note to clients, he estimated earnings for the January-March period at 55 cents a share for the Pittsburgh manufacturer, and said profit could be even higher. Analysts surveyed by FactSet are predicting first-quarter earnings of 37 cents a share.

THE BIG PICTURE: The steel industry faced difficult challenges in the fourth quarter as customers held back on making large purchases because of uncertainty about the global economy. Steel prices fell and U.S. companies were hurt by stiffer competition from other manufacturers around the world.

U.S. Steel has predicted that business will improve in the first quarter because of more demand from automobile and heavy machinery equipment manufacturers, appliance makers and the energy industry.

THE STOCK: Shares of U.S. Steel rose 14 cents to $25.39 in early trading. Shares have gained about 4 percent in 2012. In the past 52 weeks, the price has ranged from $18.85 per share to $57.55 per share.