U.S. Steel: Big Beat, Small Gain

Barron’s recommended investors take their profits on U.S. Steel (X) back in December, and the stock has moved sideways since then. Today’s earnings report doesn’t look to have moved the needle one way of the other.

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U.S. Steel reported an adjusted profit of 26 cents, well above forecasts for a cent, on sales of $2.65 billion, essentially inline. It also offered an upbeat outlook. JPMorgan’s Michael Gambardella and team offer their take:

U.S. Steel reported a 4Q16 beat. Flat Rolled performed in-line with our expectations, while USSE results exceeded our estimates due to higher shipments and lower costs.U.S. Steel disclosed that its coal cost is expected to increase by only $19/ton in 2017 compared to 2016, which is a much smaller increase than we believe the market was expecting. If current market conditions hold,U.S. Steel expects 2017 EBITDA to be $1.3bn compared to 2016 EBITDA of $510mm and current consensus estimate of $1.18bn.

Shares of U.S. Steel had gained as much as 3.9% this morning, but has advanced just 0.2% to $32.76 at 10:23 a.m. today.