NEW YORK (TheStreet) -- Shares of SunCoke Energy (SXC) - Get Report are tanking, down 7.94% to $15.53 on heavy volume in late morning trading Wednesday, after its principal customer of their Granite City cokemaking facility in Granite City, IL, U.S. Steel (X) - Get Report announced its plans to idle operations.
U.S. Steel said it will consolidate its North American flat-rolled operations to match customer demands and reflect market fluctuations.
For SunCoke Energy, domestic coke making accounts for at least 90% of revenues, and Granite City accounts for 15% of the company's annual coke making capacity, according to Briefing.com.
About 2.34 million shares of SunCoke have exchanged hands as of 11:54 a.m. ET today, compared to its average trading volume of about 437,618 shares a day.
Lisle, IL-based SunCoke is an independent producer of coke, a principal raw material in the blast furnace steelmaking process. The company has cokemaking operations in U.S., Brazil and India.
Separately, TheStreet Ratings team rates SUNCOKE ENERGY INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate SUNCOKE ENERGY INC (SXC) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its revenue growth. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 18.7%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- SUNCOKE ENERGY INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SUNCOKE ENERGY INC swung to a loss, reporting -$0.30 versus $0.58 in the prior year. This year, the market expects an improvement in earnings ($0.53 versus -$0.30).
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 25.63%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 272.72% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The gross profit margin for SUNCOKE ENERGY INC is rather low; currently it is at 16.77%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -17.29% is significantly below that of the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 695.5% when compared to the same quarter one year ago, falling from $11.00 million to -$65.50 million.
- You can view the full analysis from the report here: SXC Ratings Report