Why Many Steel Stocks May Avoid the US Steel Earnings Black Hole

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United Steel Corp. (NYSE: X) has delivered a major interruption for its investors hoping to win off of more protection for U.S. steel makers and for needing steel for endless infrastructure projects. The steel giant was supposed to be profitable but delivered a loss to shareholders in its quarterly report. The reaction has literally removed one-quarter of U.S. Steel’s market value and is bleeding over into multiple steel and advanced metals stocks.

What investors have to be concerned with here is that U.S. Steel historically has been a leader in steel. Now it has diminished in its importance, as its prominence has fallen while other companies have become more important. Steel stocks had been major beneficiaries of the so-called Trump bump due to tariff and infrastructure hopes. To prove the point further: U.S. Steel used to be a member of the Dow Jones Industrial Average and a member of the S&P 500. That was then.

A glance at other metals earnings shows the story of U.S. Steel seems to be more company-specific rather than sectorwide. That may help the other steel companies and advanced metals companies from falling into what in decades past might have been a sectorwide earnings black hole.

U.S. Steel was supposed to report earnings of $0.34 per share, but its adjusted loss came in at $0.83 per share. The net loss was even worse, at $180 million, or $1.03 per share. The company also generated negative operating cash flow of $135 million for first quarter of 2017 that was mostly tied to an investment in working capital in the quarter.

Some items can be attributed to this awful report, but revenues of $2.72 billion were far shy of the $2.93 billion that was expected. While the sales for the first quarter of 2017 were far less than expected, they were still higher than the $2.65 billion in the fourth quarter of 2016 and looked even better against the $2.341 billion from the first quarter of 2016.

It will next to impossible for U.S. Steel to regain its lost ground from the first quarter as well. The company now expects that full 2017 earnings will be closer to $1.50 per share. Analysts on average were calling for $3.05 per share.

U.S. Steel shares were last seen trading down 24.4% at $23.53 on almost 49 million shares approaching 11:00 a.m. Eastern Time on Wednesday. That is already 30 million shares more than a full day’s average trading volume. U.S. Steel has a 52-week range of $12.77 to $41.83. U.S. Steel’s market cap is now down to about $4 billion.

Here is a look at how the shadow is bleeding over on other U.S. steel players, but not than the international giants located outside of the United States.

AK Steel Holding Corp. (NYSE: AKS) was actually up after analyst commentary on its own post-earnings reaction. It was last seen trading up 2.6% at $6.56, after trading as high as $6.57 earlier. AK Steel has a 52-week trading range of $3.31 to $11.39, with a consensus analyst price target of $9.61. The company has a total market cap of $2 billion.

Commercial Metals Co. (NYSE: CMC) was up 0.7% at $19.13 on Wednesday morning, and trading volume was light. It has a consensus price target of $21.11 and a market cap of $2.2 billion. The stock trades within a 52-week range of $14.58 to $24.64.