Korean steel maker,
) reported a net income of KRW 292 billion in the first quarter
of 2013, down 54.1% year over year. Earnings per share were at
KRW 836.68 per share (US0.19 per ADR).
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Net results were adversely impacted by impairment losses on
POSCO reported roughly a 10.6% year over year decline in its
consolidated revenue that settled at KRW 14,582 billion (US$13.5
billion) for the first quarter of 2013. Results also plummeted
Non-steel sectors performed well during the quarter, registering
a revenue increase of 3.4%. These were more than offset by a
12.9% decline in the steel sector revenue.
Crude steel production was weak in the quarter at 9,069 million
tons, down 3.8% year over year. Finished product sales were also
down 3.9%; export ratio of finished product sales was at 42.1%
versus 40.0% in the first quarter 2012. Demand for finished
products was strong from the Automobile and Home Appliances
end-markets while weakness was noticed in the Shipbuilding
As a percentage of revenue, POSCO reported a year-over-year
decline of 120 basis points in consolidated cost of goods sold.
Gross margin came in at 11.5% versus 10.3% in the year-ago
Selling and administrative expenses in the quarter increased 3.3%
year over year to KRW 957 billion (US$0.89 billion). Operating
margin in the quarter improved 30 basis points and came in at
Exiting the first quarter of 2013, cash and financial goods of
POSCO came in at KRW 6,226 billion (US$5.6 billion), down 4.7%
sequentially. Non-current liabilities of the company were at KRW
17,187 billion (US$15.6 billion), up 0.7% sequentially.
For 2013, management of POSCO expects consolidated revenue to be
approximately KRW 64 trillion (versus KRW66 trillion expected
earlier). Finished product sales are estimated to be roughly 34
million tons; crude steel production about 37 million tons while
consolidated investments are likely to be approximately KRW 7 to
Global steel demand is likely to grow by 3% year over year in
2013; being largely pushed by demand growth in China, U.S, India
and Southeast Asian countries.
POSCO currently has a Zacks Rank #4 (Sell). Other stocks to watch
out for are
Gibraltar Industries, Inc.
Shiloh Industries Inc.
), each with a Zacks Rank #1 (Strong Buy) while
), has a Zacks Rank #2 (Buy).