A few steel companies are lined up to report their quarterly results this week. The steel industry falls under the broader Basic Materials sector which is among the sectors that have seen double-digit earnings declines in the first quarter based on the earnings scorecard as of Apr 29. Earnings for the sector participants in the S&P 500 index are down 13% from the same period last year on 9% lower revenues, per our latest Earnings Trend report .
The Basic Materials sector is also among 9 of the 16 Zacks sectors that are expected to see negative earnings growth in the first quarter with an expected earnings decline of 15.8% on 8.5% lower sales. However, the sector is witnessing improved blended beat which is the proportion of companies that beat both revenues and earnings estimates. Blended beat for the sector for the first quarter is 42.9%, which compares favorably to 4-quarter average of 8.9%.
Steel makers remain hamstrung by a still difficult steel market environment. High levels of imports and oversupply in the industry are still pressurizing steel prices, thereby affecting margins of these companies. Moreover, depressed oil prices are affecting demand for steel in the energy market.
The U.S. steel industry, in particular, remains under the risk of cheaper imports despite some favorable developments on the import front in the recent past (in the form of imposition of heavy tariffs on imports). Unfairly-traded, subsidized imports are still flowing into the American market due to foreign producers' overcapacity. Nevertheless, recent favorable preliminary trade rulings on steel trade cases have provided some reprieve to U.S. steel makers.
Let's take a peek at three steel companies that are gearing up to report their quarterly numbers.
ArcelorMittalMT , which is slated to report its first-quarter results on May 6, has an Earnings ESP of 0.00% as the Most Accurate Estimate and the Zacks Consensus Estimate both stand at a loss of 15 cents. The steel behemoth holds a Zacks Rank #2 (Buy), which coupled with a 0.00% ESP, makes surprise prediction difficult. ArcelorMittal has beaten the Zacks Consensus Estimate in 2 of the trailing 4 quarters while missing twice with an average negative surprise of 318.16%.
Haynes International, Inc.HAYN will report its fiscal second-quarter numbers after the bell on May 5. It has an Earnings ESP of 0.00% as the Most Accurate Estimate and the Zacks Consensus Estimate both stand at 2 cents. The stock holds a Zacks Rank #4 (Sell), which coupled with a 0.00% ESP, makes surprise prediction difficult. The company missed the Zacks Consensus Estimate in 3 of the trailing 4 quarters with an average negative surprise of 5.59%.
Ryerson Holding CorporationRYI , which will report its first-quarter results after the closing gong on May 5, has an Earnings ESP of -37.50% as the Most Accurate Estimate is 5 cents while the Zacks Consensus Estimate is pegged at 8 cents. The stock's Zacks Rank #3 (Hold) combined with a negative ESP makes surprise prediction difficult. Ryerson has beaten the Zacks Consensus Estimate in 3 of the trailing 4 quarters with an average beat of 130.69%.
Stay tuned! Check back later for our earnings coverage of these stocks.
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