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Tuesday, October 26, 2010

The Steely Eyed Underperformers (NYSE: X)

NEW YORK- U.S. Steel reported a loss of $51 million, or $0.35 per diluted share. This includes $139 million of net foreign currency gains.

U.S. Steel flat rolled division had a very disappointing quarter. In Q3, John Surma the CEO of U.S. Steel predicted the segment would break even. It turns out the division lost $174 million and in Q4 he does not expect much better.

U.S. Steel Europe also posted a loss, the companies division in Europe has been consistently profitable over the last year, and the loss of $25 million in this division was unexpected.

The Tubular segment as expected reported a better profit then in Q3, but Surma expects this number to decline in Q4.

U.S. Steel's current ratio dropped under 2 to 1, its cash dropped to $643 million. While the company's liquidity position remains strong it may be stretched if there is not a turnaround at some point in the future.

We currently estimate U.S. Steel to lose $1.71 in Q4.

To see our U.S. Steel report click here

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