US Steel slammed by lower prices, deteriorating conditions

U.S. Steel said Thursday its third-quarter earnings would be sharply lower than previously forecast due to lower steel prices and deteriorating conditions in Europe, sending shares sharply lower.

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TickerSecurityLastChangeChange %
XUNITED STATES STEEL CORPORATION13.02-0.06-0.46%

The company says it will lose approximately 35 cents per share for its third quarter of 2019. Wall Street analysts were expecting a quarterly loss of just 6 cents a share.

“The impact of falling steel prices through the second quarter, combined with the impact of a larger than expected drop in scrap prices on market sentiment, is expected to negatively impact Flat-rolled earnings in the second half of the year,” the company said in a statement. “As a result, our current assessment of the Flat-rolled segment suggests two blast furnaces will remain idled through at least the end of the year.”

The company also noted a further deterioration in Europe as the “dislocation between steel selling prices and raw material costs continues to result in significant margin compression.”

U.S. Steel’s announcement comes after rivals Nucor and Steel Dynamics said earlier this week lower prices and weaker demand would weigh on profits.

U.S. Steel shares have lost 77 percent of their value since President Trump on March 1, 2018, announced a 25 percent tariff on all steel and aluminum imports. That day, shares hit a high of $47.64 apiece, their highest level since June 2008. They’re now trading near $11.

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U.S. Steel is scheduled to report its third-quarter results on Nov. 7.