U.S. Steel beats by $1.02, beats on revs
Reports Q4 (Dec) earnings of $1.82 per share, excluding non-recurring items, $1.02 better than the Capital IQ Consensus Estimate of $0.80; revenues fell 4.6% year/year to $4.07 bln vs the $3.93 bln consensus.
* Despite the lower production levels, the co's Flat-rolled segment still achieved income from operations of $82 per ton. Shipments and average realized prices decreased from Q3 as a result of weaker spot market conditions. Co says its Flat-rolled segment continues to be adversely impacted by the acceleration of imports during 2014, but most significantly by the massive surge of imports during Q4.
* European segment results improved slightly compared to Q3 primarily due to higher shipments; lower raw materials costs, primarily for iron ore; and lower facility repairs and maintenance costs as scheduled maintenance was completed in Q3.
Q4 results for the Tubular segment increased compared to Q3. Average realized prices increased primarily due to improved pricing and mix as a result of increased alloy OCTG shipments.
* In terms of its 2015 outlook, co says it anticipates that the global economy in 2015 will expand at a moderate rate, with U.S. economic growth of approximately 3% and European economic growth of approximately 1%. Steel demand tracks directionally with GDP, and the co's view is that it will continue to see low single digit growth rates in each region, which is broadly consistent with worldsteel Association projections.
* Co expects that the depressed oil prices will have a negative impact on its Tubular segment. Although this will also be a headwind for its Flat-rolled segment, co is encouraged by the potential that improved consumer spending could provide to overall flat-rolled demand.