United States Steel Corporation saw its Q3 earnings fall 35% on a variety of one-time charges, while missing Wall Street's estimates and warning Q4 earnings will "decline" further. Shares fell 7.1% in pre-market action (as of 8:08 AM ET) on the news. Net income was $269 million, good for EPS of $2.27, versus EPS of $3.42 a year ago. A variety of one-time items took $0.23 a share off earnings, giving U.S. Steel adjusted earnings of $2.50 - well below consensus analyst EPS estimates of $2.63. Revenue climbed 6% to $4.35 billion; the Street was expecting slightly higher revenue of $4.36 billion. Despite the misses on EPS and sales, Chairman and CEO John P. Surma believes his company, "had a good quarter as each of our segments effectively responded to diverse challenges, including general economic concerns." Looking ahead: "We expect a decline in overall results for the fourth quarter mainly due to normal seasonal effects and several scheduled blast furnace outages... In Europe, steel consumption remains healthy; however, high imports, particularly from China, and high service center inventories are resulting in some pressure on spot prices and order rates." The company expects a decrease in earnings in Q4 "due primarily to lower shipments and higher raw material, outage and modernization-related costs," though steel prices are expected to remain at their Q3 levels. In other news, U.S. Steel received approval from the Canadian Minister of Industry for its purchase of Stelco, which it agreed to buy in August (full summary).
Commentary: Steel Stocks in for Trouble; US Steel's a Short - Morgan Stanley • U.S. Steel Downgraded By Credit Suisse: A Look At Past Calls • U.S. Steel to Buy Stelco for $1.1B
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