United States Steel Corp. (X - Get Report) shares traded higher Thursday after the group posted preliminary guidance for its third quarter earnings report later this month that suggests stronger-than-expected profits for the struggling steelmaker.
US Steel said it will likely post a loss for the three months ending in September of between 49 cents and 55 cents a share, or a loss of between 20 cents and 26 cents on an adjusted basis, a figure that is around 7 cents better, at the higher end, than the current Street forecast from Refinitiv.
Group sales, US Steel said, should settle between $3.04 billion and $3.075 billion, down from the $3.7 billion tally it recorded for the same period last year and largely in-line with Refinitiv forecasts. US Steel will publish its third quarter earnings on October 31.
US Steel shares were marked 1.6% higher at the start of trading Thursday to change hands at $10.24 each. Shares in the group slumped to three-year low of $9.93 yesterday, and ended the session 8.6% in the red, after unveiling plans further cost cuts and the resignation of its chief financial officer will resign.
Shares in the group, the country's biggest steelmaker, have fallen more than 78% since President Trump first imposed a 25% tariff on imported steel in March of last year.
Kevin Bradley will step down from his role as chief financial officer but will stay on in an advisory capacity to assist incoming finance chief Christine Breves, who is the firm's senior vice president and chief supply officer. US Steel also said it will kick-start an enhanced operating model, starting next year, that it hopes will save around $200 million in annual fixed costs by 2022.
Earlier this month, US Steel said it would $700 million in cash for at 49.9% stake in Big River Steel, and hold an option to buy the remaining 50.1% stake by 2023, as the industry looks to consolidate amid a slowdown in global demand and the impact of import tariffs on non-US imports.
Including debts, as well as the expected expansion of Big River's flat-rolled mill in northern Arkansas, the deal could be valued at $2.35 billion, U.S. Steel said.
That move followed a profit warning from the Pittsburgh, Pa.-based group, which said it would likely post an adjusted third quarter loss of 35 cents per share and continue idling two of its main U.S. blast furnaces owing to "the impact of falling steel prices through the second quarter, combined with the impact of a larger than expected drop in scrap prices."