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United States Steel Corporation X is set to release fourth-quarter 2024 results after the closing bell on Jan. 30.
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U.S. Steel surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing once. X has a trailing four-quarter earnings surprise of 50.4%, on average. It posted an earnings surprise of 24.4% in the last reported quarter. Weaker selling prices are likely to have hurt U.S. Steel’s fourth-quarter results.
U.S. Steel’s shares have lost 24.5% over a year, compared with the Zacks Steel Producers industry’s 24.6% decline.
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Let’s see how things are shaping up for this announcement.
What Our Model Unveils for X Stock
Our proven model predicts an earnings beat for U.S. Steel this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.
Earnings ESP: Earnings ESP for X is +1.33%. The Zacks Consensus Estimate for the fourth quarter is currently pegged at a loss of 25 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: U.S. Steel currently carries a Zacks Rank #3.
What Do U.S. Steel’s Revenue Estimates Say?
The Zacks Consensus Estimate for fourth-quarter consolidated revenues for X is currently pegged at $3,476.4 million, reflecting a year-over-year decline of 16.1%.
Factors at Play for X Stock
Weaker prices across the company’s segments are expected to have weighed on its performance in the quarter to be reported. Weaker demand is also expected to have hurt volumes.
U.S. steel prices declined sharply in 2024 due to a slowdown in end-market demand and oversupply after a strong run in late 2023 that extended into early 2024. The benchmark hot-rolled coil (HRC) prices tumbled more than 40% last year from $1,200 per short ton at the start of 2024. The downside has been influenced by a concoction of factors, including a pullback in steel mill lead times, an oversupply of steel exacerbated by increased imports, reduced demand from key industries and economic uncertainties.
Sluggish industrial production and construction activities also contributed to the decline. While the recent steel mill price hikes have led to a modest uptick in HRC prices, a significant recovery is not expected over the near term given the weak manufacturing backdrop and demand weakness. Prices are currently hovering near the $700 per short ton level. Lower selling prices are likely to have hurt U.S. Steel’s sales and margins in the quarter to be reported.
U.S. Steel, last month, lowered its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) guidance to around $150 million from its previous fourth-quarter outlook of $225-$275 million. Steel prices remained under pressure, and BR2 ramp-related costs weighed on the quarter as the Big River team worked to increase prime ton production at U.S. Steel's new mill. In Europe, demand and pricing remain weak, X noted.
Lower selling prices and volumes are expected to have hurt the profitability of the company’s Flat-Rolled segment. The Mini Mill segment's performance is likely to have been impacted by weaker volumes and ramp-related impact from BR2. Lower demand is expected to have hurt volumes and prices in the European segment, impacting its earnings. The Tubular segment is likely to have gained from higher volume and lower costs.
Our estimate for fourth-quarter average realized price per ton for the Flat-Rolled unit stands at $925, suggesting a 6.8% decrease from the prior quarter. The same for the Mini Mill segment is pegged at $779, suggesting a 2.6% sequential decrease. Our estimate for average realized price per ton for the European segment is pinned at $776, indicating a 3.2% decline from the prior quarter. The same for the Tubular segment is $1,724, reflecting a 4.5% sequential decrease.