NEW YORK (TheStreet) -- Shares of U.S. Steel Corp. (X) are up 7.10% to $44.35 in pre-market trade after the integrated steel producer said its Canadian unit would apply for bankruptcy protection, as the 113-year-old steelmaker seeks to stop the bleeding after five straight years of losses, the Wall Street Journal reports.
The company, which faces challenges including high-cost mills, labor liabilities, and competition from imports, also said it was canceling over $800 million worth of expansion projects in Minnesota and Indiana, the Journal said.
U.S. Steel Canada is seeking a court order allowing it to operate while exploring restructuring alternatives. U.S. Steel Corp. has agreed to provide $168.5 million)of financing to support current operations through the end of 2015.
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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 solid stock price performance, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and generally higher debt management risk."