U.S. Steel's (X) Q4 Earnings and Revenues Top Estimates

United States Steel Corporation X swung to a profit in fourth-quarter 2017, helped by benefits of the investments in its assets.

The steel giant reported net earnings of $159 million or 90 cents per share in the quarter, as against net loss of $105 million or 61 cents recorded a year ago. Barring one-time items, adjusted earnings came in at 76 cents per share that trounced the Zacks Consensus Estimate of earnings of 68 cents.

Revenues rose roughly 18.2% year over year to $3,133 million in the quarter, also surpassing the Zacks Consensus Estimate of $3,068 million.

Full-Year Results

For full-year 2017, U.S. Steel reported adjusted net earnings of $1.94 per share as against adjusted loss of $1.60 per share in 2016.

Net sales for the full year went up roughly 19.4% year over year to $12,250 million.

United States Steel Corporation Price, Consensus and EPS Surprise

 

United States Steel Corporation Price, Consensus and EPS Surprise | United States Steel Corporation Quote

 

Segment Highlights

Flat-Rolled: U.S. Steel’s Flat-Rolled segment recorded a profit of $92 million in the fourth quarter, reflecting an increase of roughly 41.5% year over year. Total steel shipments for the segment rose roughly 3.1% year over year to 2,442,000 tons and average realized price per ton for the flat-rolled unit was $717, up roughly 3.6% year over year.

U. S. Steel Europe (USSE): The USSE segment posted a profit of $112 million in the quarter, up 77.8% year over year. Total shipments for the segment dipped roughly 0.7% year over year to 1,252,000 tons and average realized price per ton for the unit was $634, up roughly 31% year over year.

Tubular: U.S. Steel’s Tubular segment suffered a loss of $6 million in the quarter, narrower than a loss of $87 million a year ago. Total steel shipments for the segment rose roughly 29.7% year over year to 179,000 tons and average realized price per ton for the unit was $1,417, up roughly 38% year over year.

Financials

U.S. Steel exited 2017 with cash and cash equivalents of $1,553 million, up roughly 2.5% year over year.

Long-term debt decreased roughly 9.4% year over year to $2,700 million. Cash flow from operations for 2017 increased 9.7% to $802 million.

Outlook

U.S. Steel stated that its focus in 2018 will be on improving the fundamental drivers of business including quality, delivery, cost and safety. The company expects the performance momentum it witnessed last year to continue in 2018.

For 2018, U.S. Steel expects net earnings of around $685 million or $3.88 per share and EBITDA of roughly $1.5 billion, considering market conditions at their current levels.

The company believes market conditions will change during 2018 and it expects these changes to be reflected in its EBITDA and net earnings.

Price Performance

Shares of U.S. Steel have moved up 37.1% in the last three months, outperforming the industry’s 22.8% growth.

 

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks in the basic materials space are Steel Dynamics, Inc. STLD, The Mosaic Company MOS and Huntsman Corporation HUN, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have soared 39.7% in a year’s time.

Mosaic has an expected long-term earnings growth rate of 9.5%. Its shares have rallied 54.5% over a year.

Huntsman has an expected long-term earnings growth rate of 8.3%. Its shares surged 63% over a year.

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