After reported a miss on its third quarter consensus estimates and a downbeat full year 2016 guidance, US Steel stock slides 8.66% after-hour
United States Steel Corporation (NYSE:X) stock slumped 3.26% during yesterday’ trading session and was down another 8.66% during the after-hour trading session. The company missed estimates for third quarter fiscal year 2016 (Q3FY16) earnings along with lower full year guidance as compared to consensus estimates. The stock price was expected to decline; investors lost confidence in the stock based on its current performance and future estimates, based on slowdown in the industry.
The company reported consolidated operating revenues at $2.67 billion, and missed the estimates by $150 million. Moreover, it reported earnings per share (EPS) of $0.40 and missed the estimates by $0.40 for the quarter. Industry analysts believe that the company could have beaten both the estimates for the quarter if it had announced further decline in its operating expenses that would have improved the bottom figures.
Total operating expenses were reported at $2.55 billion, down as compared to 3QFY15, when it reported $3 billion. Based on reduced operating expenses, net income of $51 million was reported this quarter, up compared to net loss of $173 million during the same quarter last year.
Furthermore, the company reported that is the main factors, such as import volumes, customer demand, spot prices, supply chain inventories, energy prices, and rig count, remains same till the end of this year. The company expects to report full year 2016 net loss of $355 million, or $2.26 loss per share. This full year guidance was lower as compared to the consensus of $0.99 loss per share for full year 2016 that further lost investors’ confidence in the stock.
Furthermore, the company reported its adjusted EBITDA for full year 2016 at approximately $475 million. This was much lower compared to its previous outlook of $850 million reported in July. Considering the full year guidance, industry experts believe that the company expects to face continuous slowdown in the industry volumes that is expected to result in reduced demand during the Q4.