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U.S. Steel (X) Sees Seasonal Slowdown to Impact Q4 Results
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United States Steel Corporation (X - Free Report) recently provided fourth-quarter 2021 guidance. The adjusted EBITDA for the fourth quarter is forecast to be roughly $1.65 billion.
The company’s Flat-rolled segment is projected to deliver adjusted EBITDA approaching $1 billion in the fourth quarter and EBITDA margins near the third-quarter record levels. The strong performance would be led by increased flow-through of higher steel selling prices, offset by cautious seasonal buying and higher raw material and energy costs, U.S. Steel noted.
The Mini Mill segment is expected to continue delivering EBITDA margins similar to the third quarter’s record performance regardless of lower volumes due to cautious seasonal buying, reflecting the high-quality earnings in the Mini Mill segment.
The company expects the European segment to deliver lower EBITDA compared with the third quarter’s record performance, impacted by lower steel prices, unfavorable currency impacts and higher planned outage. The Tubular segment is projected to deliver improved EBITDA performance compared with the previous quarter on higher steel selling prices.
The company stated that it is ending the year on a strong note position of strength and projects continued strong performance in 2022 and beyond. In the current year, the company transformed its balance sheet, provided improved direct returns to stakeholders and is on the path to reach its “Best for All” future quicker.
It is anticipated that next year, its fixed price contracts will be resetting higher, providing better earnings stability compared with competitors with more spot exposure. While the outlook for the fourth quarter reflects impressive performance, it reflects a temporary slowdown in order entry activity, which it believes is related to typical seasonal year-end buying activity, the company noted.
The company bought back roughly $100 million of the common stock quarter to date. It has completed more than $400 million of deleveraging targeted for the fourth quarter and expects to end 2021 with around $3.9 billion of debt.
Shares of U.S. Steel have gained 32.8% in the past year compared with a 36.6% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
U.S. Steel currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the basic materials space are Nutrien Ltd. (NTR - Free Report) , The Chemours Company (CC - Free Report) and AdvanSix Inc. (ASIX - Free Report) .
Nutrien has an expected earnings growth rate of 233.3% for the current year. The Zacks Consensus Estimate for NTR’s current-year earnings has been revised 16.3% upward in the past 60 days.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 73.5%, on average. The stock has rallied 48.5% in a year. NTR currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chemours has an expected earnings growth rate of 105.1% for the current year. The Zacks Consensus Estimate for CC’s earnings for the current year has been revised 10% upward in the past 60 days.
Chemours beat the Zacks Consensus Estimate for earnings in the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 34.2%, on average. It has rallied 18.4% over a year. CC currently flaunts a Zacks Rank #1.
AdvanSix has a projected earnings growth rate of 194.5% for the current year. The Zacks Consensus Estimate for ASIX’s earnings for the current year has been revised 5.9% upward in the last 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied 115.3% in a year. It currently carries a Zacks Rank #2.
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U.S. Steel (X) Sees Seasonal Slowdown to Impact Q4 Results
United States Steel Corporation (X - Free Report) recently provided fourth-quarter 2021 guidance. The adjusted EBITDA for the fourth quarter is forecast to be roughly $1.65 billion.
The company’s Flat-rolled segment is projected to deliver adjusted EBITDA approaching $1 billion in the fourth quarter and EBITDA margins near the third-quarter record levels. The strong performance would be led by increased flow-through of higher steel selling prices, offset by cautious seasonal buying and higher raw material and energy costs, U.S. Steel noted.
The Mini Mill segment is expected to continue delivering EBITDA margins similar to the third quarter’s record performance regardless of lower volumes due to cautious seasonal buying, reflecting the high-quality earnings in the Mini Mill segment.
The company expects the European segment to deliver lower EBITDA compared with the third quarter’s record performance, impacted by lower steel prices, unfavorable currency impacts and higher planned outage. The Tubular segment is projected to deliver improved EBITDA performance compared with the previous quarter on higher steel selling prices.
The company stated that it is ending the year on a strong note position of strength and projects continued strong performance in 2022 and beyond. In the current year, the company transformed its balance sheet, provided improved direct returns to stakeholders and is on the path to reach its “Best for All” future quicker.
It is anticipated that next year, its fixed price contracts will be resetting higher, providing better earnings stability compared with competitors with more spot exposure. While the outlook for the fourth quarter reflects impressive performance, it reflects a temporary slowdown in order entry activity, which it believes is related to typical seasonal year-end buying activity, the company noted.
The company bought back roughly $100 million of the common stock quarter to date. It has completed more than $400 million of deleveraging targeted for the fourth quarter and expects to end 2021 with around $3.9 billion of debt.
Shares of U.S. Steel have gained 32.8% in the past year compared with a 36.6% rise of the industry.
Zacks Rank & Other Key Picks
U.S. Steel currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the basic materials space are Nutrien Ltd. (NTR - Free Report) , The Chemours Company (CC - Free Report) and AdvanSix Inc. (ASIX - Free Report) .
Nutrien has an expected earnings growth rate of 233.3% for the current year. The Zacks Consensus Estimate for NTR’s current-year earnings has been revised 16.3% upward in the past 60 days.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 73.5%, on average. The stock has rallied 48.5% in a year. NTR currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chemours has an expected earnings growth rate of 105.1% for the current year. The Zacks Consensus Estimate for CC’s earnings for the current year has been revised 10% upward in the past 60 days.
Chemours beat the Zacks Consensus Estimate for earnings in the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 34.2%, on average. It has rallied 18.4% over a year. CC currently flaunts a Zacks Rank #1.
AdvanSix has a projected earnings growth rate of 194.5% for the current year. The Zacks Consensus Estimate for ASIX’s earnings for the current year has been revised 5.9% upward in the last 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied 115.3% in a year. It currently carries a Zacks Rank #2.