(U.S. Steel earnings story updated with further detail from the company's second-quarter report.)
startled Wall Street by posting a second-quarter loss Tuesday and by suggesting that its results may deteriorate further in the third period.
Analysts had expected the big industrial icon to turn the corner into profitability after a string of red ink stretching back to the start of the recession.
Investors sent shares of U.S. Steel down sharply Tuesday morning. In recent trades, the stock was moving at $45.71, down 6.5%, on heavy volume.
Before the opening bell, the company reported a net loss in the second quarter of $25 million, or 17 cents a share. The bottom-line numbers included a loss of $96 million, or 62 cents a share, that U.S. Steel blamed on the weakening of the euro against the dollar during the quarter, which hit an intercompany loan U.S. Steel made to one of its European units.
Subtracting the loss, the company would have earned 45 cents a share -- still worse than the 63-cent per share profit that analysts, on average, were expecting, according to a survey of the sell side by Thompson Reuters.
A year ago, U.S. Steel lost $392 million, or $2.92 a share.
It wasn't all bad news. U.S. Steel's second-quarter revenue came to $4.68 billion, more than double the top line it recorded a year ago -- $2.13 billion -- and beating the consensus top-line estimate of $4.63 billion.
But the company's near-term outlook remains anything but clear as the steelmaker struggles to deal with an "uneven recovery process," in the words of CEO John Surma. In a press release, the U.S. Steel boss said he expects the company to "report an overall operating profit in the third quarter," but that the results will be "below the second quarter." He attributed the decline to weaker shipments of the company's flat-rolled steel products.
The predicted third-quarter decline appears to be a disappointment. For now, analysts are expecting U.S. Steel to post a profit of $1.04 in the third quarter, a target that will likely need to be adjusted lower.
U.S. Steel's outlook parallels the murky guidance offered by other steelmakers this earnings season.
both offered cautious outlooks on the rest of the year when they reported last week. And
indicated that a short-term slowdown
may be afoot.
-- Written by Scott Eden in New York
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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.