
U.S. Steel (X) Stock Slumps as Steel Output Drops
NEW YORK (TheStreet) -- U.S. Steel (X) - Get Report stock is falling by 7.44% to $11.94 in afternoon trading on Tuesday, following a drop in global crude steel output in August, making it the fourth consecutive month of declines.
Output last month decreased by 3% year-over-year to 132 million metric tons as Chinese output was down by 3.5% and Japanese output dropped by 5.8%, according to World Steel Association data, Reuters reports.
China, which accounts for half of the steel production in the world, has seen its output decline due to the country's economic slow growth, which is leading to a lack of demand.
Steel prices have fallen as a result of China's boost in exports, which has crowded the global market, Reuters added.
In the U.S., output dropped 10% as companies try to compete with cheaper imports.
India increased output by 2.8% because of the country's growing economy, Reuters noted.
Separately, TheStreet Ratings team rates UNITED STATES STEEL CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate UNITED STATES STEEL CORP (X) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself. "
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 1350.0% when compared to the same quarter one year ago, falling from -$18.00 million to -$261.00 million.
- The debt-to-equity ratio of 1.00 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, X maintains a poor quick ratio of 0.84, which illustrates the inability to avoid short-term cash problems.
- The gross profit margin for UNITED STATES STEEL CORP is currently extremely low, coming in at 3.72%. It has decreased from the same quarter the previous year.
- Net operating cash flow has significantly decreased to $79.00 million or 89.91% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 69.77%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1391.66% 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.
- You can view the full analysis from the report here: X








