NEW YORK (TheStreet) -- U.S. Steel(X) - Get Report shares are up by 5.36% to $18.68 in early market trading on Wednesday, after the metal manufacturer announced plans to idle its Fairfield, AL blast furnace.
The company will idle the plant in mid-August as it looks to cut down on its raw material inventory, spokeswoman Country Boone said, according to the Pittsburgh Business Times.
Last month the company updated the notices it sent to 1,900 employees in January, saying that potential layoffs could affect 1,414 union and non-union employees.
U.S. Steel is looking to trim its overhead as it faces headwinds due to a strengthening dollar and an influx of what it claims are unfairly traded imports from China.
The company reported a net loss of $261 million when it reported its 2015 second quarter earnings results last Tuesday.
Separately, 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 largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- X, with its decline in revenue, slightly underperformed the industry average of 17.4%. Since the same quarter one year prior, revenues fell by 26.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- X's debt-to-equity ratio of 0.96 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.88 is weak.
- 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. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, UNITED STATES STEEL CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for UNITED STATES STEEL CORP is currently extremely low, coming in at 6.30%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.29% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to $136.00 million or 76.14% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: X Ratings Report