Earnings Preview: US Steel, AK Steel

NEW YORK (TheStreet) -- Earnings of U.S. Steel(X), and AK Steel(AKS) will likely showcase the impact of iron ore costs on the two companies.

AK Steel's earnings will be greatly depend on provisional price assumption for iron ore, as the company did not account for higher iron ore prices for the second-quarter order book. On the other hand, margins of U.S. Steel would have been less impacted due to the company's captive iron ore supplies.

Both AK Steel and U.S. Steel are scheduled to announce second-quarter results on July 27 before markets open.

AK Steel

Analysts polled by Bloomberg expect the company to post earnings of 9 cents per share compared to loss of 43 cents per share, and earnings of 2 cents per share during the second quarter of 2009 and first quarter of 2010, respectively.

Sales for the period are expected at $1.553 billion compared to $793 million a year earlier, and $1.406 billion a quarter ago. Meanwhile, EBITDA for the quarter is expected to reach $58 million from $114 million a quarter ago and a negative $18 million a year ago.

These numbers indicate the impact of iron ore price hikes. Although sales are expected to increase 10% compared to the first quarter, EBITDA is anticipated to plunge 49.1%.

Consensus earnings estimates of analysts for the second quarter declined from 33 cents to the current 9 cents a share, over the past three months, due to the impact of higher iron ore prices.

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U.S. Steel

The company is set to post profits for the first time since the fourth quarter of 2008. Analysts polled by Bloomberg expect the company to report earnings of 50 cents per share compared to loss of $2.92 per share and $1.10 per share in the second quarter of 2009 and first quarter of 2010, respectively.

Sales for the period are expected at $4.630 billion compared to $2.127 billion a year earlier, and $3.896 billion a quarter ago. Meanwhile, EBITDA for the quarter is expected to reach $355 million from $109 million and a negative $367 million in the first quarter of 2010 and second quarter of 2009, respectively.