Hot stock to watch: United States Steel Corporation (NYSE: X)

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United States Steel Corporation (NYSE: X) stock fell 11.16% on December 19th, 2019 but recovered over 1% on 20th September, 2019 (as of 10:42 am GMT-4; Source: Google finance). The company for the third quarter 2019, expect adjusted EBITDA to be about $115 million, which excludes approximately $53 million of projected third quarter impact due to the December 24, 2018 fire at the Clairton coke making facility and projected restructuring charges.  The company expects third quarter 2019 adjusted diluted loss per share to be about ($0.35), while the analysts surveyed by FactSet had projected an adjusted loss of 10 cents a share

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The flat-rolled steel market was positive earlier this summer have softened after a slight recovery in steel selling prices.  The impact of falling steel prices through the second quarter, along with the impact of a larger than expected decline in scrap prices on market sentiment, is projected to negatively impact Flat-rolled earnings in the second half of the year.

As per this environment for the Flat-rolled segment, reflects that two blast furnaces will remain idled through at least the end of the year.  Based on the continued idling of the two U.S. blast furnaces and current demand forecasts, the company now expect full year 2020 Flat-rolled shipments to third party customers to be about 10.7 million tons.  In Europe, the market conditions have continued to remain sluggish, as the dislocation between steel selling prices and raw material costs led to the significant margin compression.  Based on this challenging market conditions and the continued high level of steel imports into Europe, the company do not anticipate to restart the currently idled blast furnace this year.  As a result, the company reiterate the full year 2020 shipment guidance to be of approximately 3.6 million tons.

The company also continue to execute the labor productivity strategy at U. S. Steel Europe, which also included the headcount reduction of 2,500 by the end of 2021.  To date, the company have eliminated approximately 1,800 positions.

The company expect that its Tubular segment will continue to remain under pressure for the remainder of the year as market conditions have turned negative and import levels are high.  Weaker demand for oil country tubular goods product, which has reduced the company’s shipment expectation for fiscal 2020 to be approximately 0.7 million tons, and lower selling prices for seamless and welded pipe, are projected to have a significantly negative effect on earnings in the second half of the year.

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