United States Steel Corporation
) swung to a profit in first-quarter 2014 as it benefited from
its cost improvement actions under the Carnegie Way initiative
and higher pricing that offset headwinds from harsh weather.
Net income for the reported quarter was $52 million or 34
cents per share compared with a net loss of $73 million or 51
cents per share recorded in the year-ago quarter. However, it
missed the Zacks Consensus Estimate of 37 cents.
United States Steel Corp - Quarterly Earnings
Per Share | FindTheBest
Revenues for the first quarter fell roughly 3.2% year over
year to $4,488 million, also missing the Zacks Consensus Estimate
of $4,583 million.
Shipments for the reported quarter was 5.1 million, down from 5.5
million recorded a year ago, impacted by bad weather
U.S. Steel's Flat-rolled segment reported a profit of $85
million in the first quarter compared with a loss of $13 million
in the year-ago quarter and an income $87 million in the fourth
quarter of 2013. Average realized prices increased due to higher
contract and spot market prices. Shipments also increased
due to production at Lake Erie Works for the full quarter.
The U.S. Steel Europe (USSE) segment recorded a profit of $32
million in the quarter, down from last year's profit of $38
million and up from $12 million in fourth-quarter 2013. The
segment posted profit in the quarter due to higher average
realized prices and $17 million of favorable effects from
transactions to sell and swap a portion of its carbon emission
U.S. Steel's Tubular segment profit was $24 million in the
first quarter, down 62.5% year over year and 25% sequentially.
The sequential decline was mainly due to lower average realized
prices and increased substrate costs.
Profit for the Other Businesses segment rose 160% year over
year but declined 13.3% sequentially to $13 million.
U.S. Steel had cash and cash equivalents of $1,099 million as
of Mar 31, 2014, up from $604 million as of Dec 31, 2013.
Long-term debt was $3,615 million as of Mar 31, 2014, essentially
flat compared with $3,616 million as of Dec 31, 2013.
Moving ahead, U.S. Steel expects lower income from operations
in the second quarter of 2014. The company expects production to
be limited and the supply of raw materials and finished products
to be less due to temporarily slow shipments, mainly resulting
from continued weather-related logistical issues.
The company expects to report a loss in its Flat rolled
segment for the second quarter. The unfavorable weather
conditions are expected to limit production capabilities,
increase costs and reduce shipments.
U.S. Steel expects results for its European segment to
decrease in the second quarter due to the absence of the sale and
swap of carbon emission allowances in the first quarter.
Shipments and average realized prices are expected to be at par
with the first quarter.
Tubular results are forecast to increase compared to the first
quarter. Shipments are projected to be higher due to
increased drilling activity. The company expects average
realized prices to be in line with the first quarter.
The company expects to retire the Senior Convertible Notes due in
May 2014 without refinancing.
U.S. Steel currently carries a Zacks Rank #3 (Hold).
Other players in the steel industry worth considering are
Companhia Siderurgica Nacional
). While Companhia Siderurgica carries a Zacks Rank #1 (Strong
Buy), Gerdau and ThyssenKrupp hold a Zacks Rank #2 (Buy).
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