US Steel Shares Jump 7% Premarket After Earnings Beat; J.P. Morgan Rates Stock Overweight

Shares of U.S. Steel Corp. rocketed 7% in premarket trade Wednesday, after the company reported stronger-than-expected earnings for the second quarter and offered upbeat guidance for the year. US Steel said it had per-share earnings of $1.48 a share on revenue of $3.14 billion. Analysts surveyed by FactSet had estimated earnings of 36 cents a share on revenue of $2.98 billion. U.S. Steel expects full-year earnings of $1.70 a share, while analysts estimate earnings of 84 cents a share. J.P. Morgan analyst Michael Gambardella said the beat was driven by flat rolled realized prices and costs. "Costs were lower due to the benefits from the restart of the Keetac facility and typical seasonal improvements in the mining operations," he wrote in a note ahead of the company's earnings call. "Tubular posted a smaller than expected loss with higher shipments and average selling prices as well as lower costs." J.P. Morgan is expecting the call to hear questions on guidance, the company's asset revitalization program and management's view on Section 232. President Trump has asked the Department of Commerce to conduct a seldom-used Section 232 investigation to determine whether steel imports are harming U.S. national security. Secretary Wilbur Ross has said he intends to complete the report by the end of June. J.P. Morgan rates the stock as overweight. US Steel shares are down 26% in 2017 through Tuesday, while the S&P 500 has gained 10.6%.