BUZZ-US Steel drops as shutdown triggers biggest adj loss in 12 qtrs
01/05/2020 15:28 RSF
** Shares in U.S. Steel (
X.N) down 4.6% premarket after Q1 revenue falls below estimates, co reports biggest adjusted loss in 12 qtrs as the coronavirus crisis hits manufacturing activity
** Co reports Q1 rev of $2.75 bln vs est $2.78 bln; adj loss of 73 cents/shr, its widest since Q1 March 2017
** However, analysts were expecting a loss of 88 cents/shr, according to Refinitiv est
** U.S. stock futures down 2% after President Donald Trump threatens new tariffs on Chinese good over COVID-19 crisis [.N]
** "Automative production shutdowns are having a significant impact on demand. Approximately 25% of our flat-rolled shipments serve this strategic end markets " says CEO David Burritt in a post-earnings call (
news)
** To cope the COVID-19 situation, US Steel plans to layoff 2,700 employees and idle blast furnaces at certain mines
** Jefferies says lower costs, performance in Europe helped co's Q1 adj EBITDA of $64 mln beat brokerage's est of $35 mln
** Co also enters deal with Stelco, allowing it to buy a 25% stake in Minntac iron ore mining operations for $600 mln, giving it capital to support its acquisition of 49.9% interest in Big River Steel
** Stock down ~33% so far this year vs 10% decline in S&P 500 <.SPX>
(Reporting by Sruthi Shankar in Bengaluru)