Like so many other companies, U.S. Steel's
In its most recent quarter, the United States' largest steel manufacturer turned in a loss of $303 million. And while that topped the loss of $392 million in the June quarter, it wasn't close to the $919 million in year-ago earnings. Revenue of $7.3 billion last year slid to $2.8 billion in the most recent quarter. The per-share line fell from earnings of $7.79 a year ago to a loss of $2.11 in the period ended in September.
U.S. Steel operates through three divisions: flat-rolled, U.S. Steel Europe, and tubular. The flat-rolled steel, which accounted for 67% of the firm's $1.3 billion in operational profits a year ago, lost $370 million in the quarter, tacking on an additional $8 million in losses sequentially. The European operation managed to eke out $7 million to the upside, compared to a loss of $53 million last quarter. And the tubular unit, much of whose product is used in the oil patch, lost $21 million, versus $88 million last quarter.
So the sequential results (which become far more important in a time of rapidly changing business conditions), while improving on an aggregate basis, were mixed for the company. This reflects a steel industry that is showing very little uniformity these days. For instance, Steel Dynamics
Looking ahead, as CEO John Surma noted on his company's conference call, "We expect to report an overall operating loss in the fourth quarter, due primarily to continued low operating rates and idled facility carrying costs for our flat rolled and tubular segments." From my perspective, the company is at the mercy of macro conditions. Absent stronger demand for the sort of products turned out by Caterpillar
In the meantime, I wouldn't hurry out to buy what we used to call "Big Steel." There are lots of companies that are far more compelling in today's market.
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