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U.S. Steel (X) Gives Q1 Guidance, Sees Improved Market Trends
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United States Steel Corporation (X - Free Report) recently announced the guidance for the first quarter of 2022. The adjusted EBITDA for the quarter is projected to be roughly $1.3 billion, setting a new all-time record for the quarter. First-quarter adjusted earnings per share is projected between $2.96 and $3.
U.S. Steel stated that it expects to deliver another strong quarter of safety, adjusted EBITDA, free cash flow and operational performance in the first quarter. At the start of the year, the company had expected softness in the market coupled with normal seasonal impacts related to its mining operations. It is ending the quarter with spot business accelerating, steel prices increasing and the longest backlog at its Big River Steel operations since October. As a result of the continued execution of its differentiated commercial strategy, it realizes a considerable uptick on fixed-price contracts.
It also projects improving market conditions to continue into the second quarter as seasonal demand improves and buyers start to shift their attention to a more reliable, regional steel supply amid the geopolitical risks and cost volatility, which has increased in recent weeks.
The company expects the Flat-rolled segment’s adjusted EBITDA to be impacted by roughly $150 million related to the seasonal mining headwinds, which occurs each year in the first quarter, as well as higher raw material costs, and a larger than expected headwind from cautious spot market activity. These are expected to be partly offset by higher revenues from its fixed-price contracts.
The Mini Mill segment is projected to continue delivering adjusted EBITDA margins similar to 2021 levels, reflecting the high-quality earnings of the segment. The European segment is forecast to deliver adjusted EBITDA approaching fourth-quarter levels and is expected to be the third-best quarterly adjusted EBITDA. The company witnessed stable steel prices and demand throughout January and February and the segment gained from having its third blast furnace back on line in February following a 60-day planned outage. The Tubular segment’s adjusted EBITDA is projected to nearly double fourth-quarter 2021’s performance. Accelerated selling prices led to expanded margin performance in the segment.
Shares of U.S. Steel have gained 79.4% in the past year compared with a 36.9% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
U.S. Steel currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are The Mosaic Company (MOS - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Allegheny Technologies Incorporated (ATI - Free Report) .
Mosaic has a projected earnings growth rate of 125% for the current year. The Zacks Consensus Estimate for MOS' current-year earnings has been revised 33.3% upward in the past 60 days.
Mosaic beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 3.7%, on average. MOS has rallied around 117.4% in a year and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AdvanSix has a projected earnings growth rate of 64.8% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 58% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being 23.6%. ASIX has surged 101.5% in a year. The company sports a Zacks Rank #1.
Allegheny, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 661.5% for the current year. The Zacks Consensus Estimate for ATI's earnings for the current year has been revised 45.6% upward in the past 60 days.
Allegheny beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 127.2%. ATI has rallied around 35.7% over a year.
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U.S. Steel (X) Gives Q1 Guidance, Sees Improved Market Trends
United States Steel Corporation (X - Free Report) recently announced the guidance for the first quarter of 2022. The adjusted EBITDA for the quarter is projected to be roughly $1.3 billion, setting a new all-time record for the quarter. First-quarter adjusted earnings per share is projected between $2.96 and $3.
U.S. Steel stated that it expects to deliver another strong quarter of safety, adjusted EBITDA, free cash flow and operational performance in the first quarter. At the start of the year, the company had expected softness in the market coupled with normal seasonal impacts related to its mining operations. It is ending the quarter with spot business accelerating, steel prices increasing and the longest backlog at its Big River Steel operations since October. As a result of the continued execution of its differentiated commercial strategy, it realizes a considerable uptick on fixed-price contracts.
It also projects improving market conditions to continue into the second quarter as seasonal demand improves and buyers start to shift their attention to a more reliable, regional steel supply amid the geopolitical risks and cost volatility, which has increased in recent weeks.
The company expects the Flat-rolled segment’s adjusted EBITDA to be impacted by roughly $150 million related to the seasonal mining headwinds, which occurs each year in the first quarter, as well as higher raw material costs, and a larger than expected headwind from cautious spot market activity. These are expected to be partly offset by higher revenues from its fixed-price contracts.
The Mini Mill segment is projected to continue delivering adjusted EBITDA margins similar to 2021 levels, reflecting the high-quality earnings of the segment. The European segment is forecast to deliver adjusted EBITDA approaching fourth-quarter levels and is expected to be the third-best quarterly adjusted EBITDA. The company witnessed stable steel prices and demand throughout January and February and the segment gained from having its third blast furnace back on line in February following a 60-day planned outage. The Tubular segment’s adjusted EBITDA is projected to nearly double fourth-quarter 2021’s performance. Accelerated selling prices led to expanded margin performance in the segment.
Shares of U.S. Steel have gained 79.4% in the past year compared with a 36.9% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
U.S. Steel currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are The Mosaic Company (MOS - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Allegheny Technologies Incorporated (ATI - Free Report) .
Mosaic has a projected earnings growth rate of 125% for the current year. The Zacks Consensus Estimate for MOS' current-year earnings has been revised 33.3% upward in the past 60 days.
Mosaic beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 3.7%, on average. MOS has rallied around 117.4% in a year and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AdvanSix has a projected earnings growth rate of 64.8% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 58% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being 23.6%. ASIX has surged 101.5% in a year. The company sports a Zacks Rank #1.
Allegheny, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 661.5% for the current year. The Zacks Consensus Estimate for ATI's earnings for the current year has been revised 45.6% upward in the past 60 days.
Allegheny beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 127.2%. ATI has rallied around 35.7% over a year.