Personal Finance

US Steel's Stock Jumps 10% After Company Reports a Less-Than-Expected Loss, Ups Guidance

Image source: Getty Images.

What: Shares of steelmaker U.S. Steel (NYSE: X) are up 10.8% as of 10:45 a.m. EDT after the company reported a net income loss that was much smaller than analysts expected for the quarter.

So what: U.S. Steel posted a loss of $0.32 per share on a GAAP basis. While that doesn't sound great on the surface, it was much better than the $0.46 per-share loss that analysts were expecting. U.S. Steel attributed its improved results to better pricing on flat rolled steel, as well as to gains in its European segment.

To add to the good news, U.S. Steel updated its guidance and said that it expects to generate $0.34 per share on EBITDA of $850 million. The big change in guidance was mostly attributed to the gains in prices that the company foresees holding up at least a little while as import tariffs lift domestic steel prices.

Now what: Higher prices is just what the doctor ordered for U.S. Steel and its domestic steelmaking peers. For a few years now, cheap imports have been undercutting the company's ability to generate any form of profit. What is more important, though, is that U.S. Steel continues to cut costs. It made some progress this quarter, but it still has a way to go before its cost structure is low enough to ensure sustainable profits. Until the company can prove that it is capable of generating consistent profits with more modest steel prices, it's probably best to sit this one out and wait to see how the company does.

A secret billion-dollar stock opportunity

The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .

Tyler Crowe has no position in any stocks mentioned. You can follow him at Fool.comor on Twitter @TylerCroweFool .

The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Personal Finance Videos

    #TradeTalks: Forbes Advisor personal finance expert reviews how the American Rescue Plan is progressing

    Forbes Advisor Personal Finance Expert Kelly Anne Smith joins Jill Malandrino on Nasdaq #TradeTalks​ to discuss how the American Rescue Plan is progressing and what it means for those expected to receive funds.

    Feb 11, 2021

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More