During this morning’s U.S. Steel earming conference call, CEO Mario Longhi said he was optimistic that tubular steel had bottomed and that trade issues were improving thanks to tighter controls by US regulators to make sure Chinese companies weren’t circumventing the law and dumping government subsidized steel on American shores.
Additionally, he praised Donald Trump for remaining true to his campaign promises to encourage people to buy American and hire American — citing The Donald as being very open and curious — which he viewed as rightly optimistic for the state of his business.
Trade issues? It’s one of the areas where opportunity remains real. We continue to remain engaged, good work is being done. Commerce Dept is now issuing more details on what is being shipped and from where, this should help with enforcement.
Trump administration has openly declared they will do everything they can to enforce the trade laws. One area that remains a concern is circumvention. But co feels optimistic about trade issues. Co does not like to use the word protectionism, we are not asking for a favor. Rule of law needs to prevail everywhere and US Steel will remain vigilant, otherwise conditions will quickly return.
Can you break down $1 bln headwind forecast for raw materials in 2017? Coal prices are much higher in Europe, that’s really what’s driving it more than in the US.
What is Trump asking from you? Trump is remaining true to his promises, buy America, hire America. He has been very open and is paying attention. We think this is all very positive. He’s very curious and once cabinet in place, conversation will continue and action will follow which will be positive for the steel industry.
For the quarter, $X crushed earnings and guided up FY17 earnings to an astounding $3.08 v previously expected $1.67.
Reports Q4 (Dec) earnings of $0.27 per share, excluding non-recurring items, $0.29 better than the Capital IQ Consensus of ($0.02); revenues rose 3.0% year/year to $2.65 bln vs the $2.67 bln Capital IQ Consensus.
Co issues upside guidance for FY17, sees EPS of $3.08 vs. $1.67 Capital IQ Consensus and EBITDA of ~$1.3 billion; Results for our Flat-Rolled, European, and Tubular segments to be higher than 2016; To be cash positive for the year, primarily due to improved cash from operations; and Other Businesses to be comparable to 2016 and ~$50 million of postretirement benefit expense.
Over the past three months, shares of X have scorched higher by 69% — based off the hopes of a robust Trumponion fiscal stimulus budget. Any wall, bridge, tunnel or pipeline would likely require lots of American steel — which is the core thesis behind the shares of X.
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