What happened
One day after AK Steel (AKS +0.00%) lost nearly 12% in an earnings miss, larger rival United States Steel (X +0.00%) reminded investors that it's not all bad news in Steel Town.
Reporting earnings yesterday after close of trading, U.S. Steel confirmed that its Q3 earnings, while bad, were not quite as bad as anticipated. Expected to report a non-GAAP (adjusted) loss of $0.29 per share on sales of only $3.05 billion, USX eked out a small sales beat ($3.07 billion) and reported a much less devastating loss -- $0.21 per share.
Image source: Getty Images.
So what
Granted, that was only the pro forma loss. When you calculate according to GAAP, U.S. Steel actually lost $0.49 per share.
Granted, too, that was a huge reversal from the $1.62 per share the company earned in last year's Q3. (Sales also declined, down 18% year over year).
But still...an earnings beat is an earnings beat, and investors seem happy, with U.S. Steel stock up 16.2% as of 10 a.m. EDT this morning.
Now what
Can U.S. Steel repeat the feat going forward? CEO David Burritt noted that "market headwinds persist," yet says management is working to control "what we can control, including" by making its investment in steel mini-mill operator Big River Steel its "strategic priority number one," while also "re-scoping our asset revitalization investments and reducing fixed costs."
In evidence of which, U.S. Steel managed to cut its spending on selling, general, and administrative expenses by 8.5% last quarter. Sure, that still wasn't enough to offset the revenue drop, but it was a move in the right direction.
