U.S. Steel’s Q2 2016 Earnings Preview: Improved Business Conditions In The U.S. And Cost Reduction Initiatives To Prop Up Results

-7.39%
Downside
38.87
Market
36.00
Trefis
X: United States Steel logo
X
United States Steel

We expect U.S. Steel to report an improvement in its Q2 2016 results as compared to last year with the company’s net loss likely to narrow. Regulatory intervention in the form of the imposition of preliminary antidumping duties by the Department Of Commerce on steel imports from a number of countries to the U.S., in response to a petition by domestic steelmakers, has boosted the prospects of the domestic steel industry, prompting us to revise our forecasts for U.S. Steel’s Flat-rolled division. Moreover, The Carnegie Way, which is U.S. Steel’s ongoing company-wide initiative to reduce costs and improve operational efficiency, is expected to boost the company’s margins to the tune of $600 million this year and help prop up the company’s profits. However, a sharp decline in oil and gas drilling activity as a result of the decline in oil prices over the course of the last year will negatively impact the fortunes of the company’s U.S. Tubular division, which produces steels used in oil and gas drilling.

X Q2 2016 Earnings Preview 3

X Q2 2016 Earnings Preview 2

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Have more questions about U.S. Steel? See the links below.

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for U.S. Steel

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