United States Steel CorporationX swung to a profit in first-quarter 2018, backed by improved results across all three of its reportable segments.
The steel giant reported net earnings of $18 million or 10 cents per share in the quarter against net loss of $180 million or $1.03 recorded a year ago. Barring one-time items, adjusted earnings came in at 32 cents per share that beat the Zacks Consensus Estimate of earnings of 29 cents.
Revenues rose roughly 15.6% year over year to $3,149 million in the quarter. The figure also surpassed the Zacks Consensus Estimate of $3,100.5 million.
United States Steel Corporation Price, Consensus and EPS Surprise
Flat-Rolled : U.S. Steel's Flat-Rolled segment recorded a profit of $33 million in the first quarter against a net loss of $88 million a year ago.
Total steel shipments for the segment rose roughly 5.4% year over year to 2,534,000 tons and average realized price per ton for the unit was $740, up roughly 2.9%.
U. S. Steel Europe (USSE) : The USSE segment posted a profit of $110 million in the quarter, up 26.4% year over year. Total shipments for the segment rose roughly 1.6% to 1,127,000 tons and average realized price per ton for the unit was $707, up roughly 19% year over year.
Tubular : U.S. Steel's Tubular segment incurred a loss of $27 million in the quarter, which was much narrower than a loss of $57 million recorded a year ago.
Total steel shipments for the segment rose roughly 24.3% year over year to 179,000 tons and average realized price per ton for the unit was $1,387, up roughly 26.4%.
U.S. Steel ended the first quarter with cash and cash equivalents of $1,372 million, up 3.5% from the prior-year quarter.
Long-term debt decreased roughly 6.6% year over year to $2,571 million.
U.S. Steel stated that it is beginning the second year of its asset revitalization program and is already witnessing the benefits from the investments in its assets. The company remains focused on managing operating volatility and believes that the restart of steelmaking facility at Granite City will increase its ability to do so.
There are uncertainties surrounding how product exclusion and country exemption requests related to Section 232 will be resolved, U.S. Steel noted. However, the company will continue investing in revitalizing its assets and developing innovative customer solutions. It is also confident of delivering its 2020 performance goals.
However, the company is presently experiencing some operational challenges at its steelmaking facility at Great Lakes Works. As a result, it expects to have an unfavorable EBITDA impact of roughly $30 million on second-quarter results. U.S. Steel believes that adjusted EBITDA in the second quarter will be roughly $400 million while the same for full-year 2018 is expected to be roughly $1.7-$1.8 billion
Shares of U.S. Steel have gained 42.5% in the past six months, outperforming the industry 's 15.5% growth.
Zacks Rank & Other Stocks to Consider
U.S. Steel currently carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks in the basic materials space include Steel Dynamics, Inc. STLD , Univar Inc. UNVR and Kronos Worldwide Inc. KRO , each sporting a Zacks Rank #1. 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 27.7% over a year.
Univar has an expected long-term earnings growth rate of 9%. Its shares have rallied 59.4% over a year.
Kronos has an expected long-term earnings growth rate of 5%. Its shares have surged 35.3% over a year.
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