NEW YORK (TheStreet) -- United States Steel (X) - Get United States Steel Corporation Report shares are down 5.84% to $26.95 in trading on Monday after the South Korean government filed a complaint with the World Trade Organization seeking to nullify the tariffs the U.S. government placed on South Korean steel imports.
The filing would force the two sides to begin negotiations within a month according to WTO rules. If an agreement is not reached by February then the WTO will make its own ruling on the matter, according to Dow Jones Business News.
Exclusive Report:Jim Cramer's Best Stocks for 2015
South Korea's filing is in response to a July Commerce Department imposition of tariffs of up to 16% on South Korean imports of steel pipes and tubes used for oil drilling. Last year South Korea exported 894,300 tons of such steel products worth a total of $817 million to the U.S.
At the time the U.S. said that the tariffs were imposed in response to South Korean companies dumping their steel products in the U.S. market at artificially low prices. U.S. Steel stock gained following the imposition of the tariffs.
TheStreet Ratings team rates UNITED STATES STEEL CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate UNITED STATES STEEL CORP (X) 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. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- X's revenue growth has slightly outpaced the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 11.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 88.4% when compared to the same quarter one year prior, rising from -$1,791.00 million to -$207.00 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Metals & Mining industry and the overall market, UNITED STATES STEEL CORP's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- The gross profit margin for UNITED STATES STEEL CORP is rather low; currently it is at 16.11%. Regardless of X's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, X's net profit margin of -4.51% significantly underperformed when compared to the industry average.
- Net operating cash flow has significantly decreased to -$106.00 million or 386.48% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: X Ratings Report