Boston, MA 11/05/2013 (wallstreetpr) – Ailing American steel manufacturer United States Steel Corporation (NYSE:X) will write down the value of some units to the tune of $1.8 billion, permanently shutting down parts of its plants in the U.S. and Canada in a desperate bid to stem costs after four unprofitable quarters in a row. Stocks of the struggling steel major, however, soared by over 4% in trading on November 04, after analysts advocated a buy on steel stocks in the wake of rising steel demand worldwide. With domestic steel prices recovering in USA and worldwide demand-supply scenarios perking up, analysts feel the steel industry could sustain better recovery and gains over the years to come.
The largest steel producer in the U.S. by volume, the Pittsburgh, Pennsylvania-based company manufactures and markets steel mill products in North America and Europe, with iron ore and coke production, transportation services (railroad and barge operations) and real estate operations in North America. Reeling under its recent financial crisis, the steel industry of the U.S. has been struggling to recover from overcapacity and global economic slowdown.
U.S. Steel had reported a net loss of $1,791 million for the 2013 third quarter, compared with a second quarter 2013 net loss of $78 million, triggering off pessimism among investors. Its third quarter 2012 net income stood at $44 million, with adjusted net income of roughly $66 million for the third quarter 2012. Despite the negative sentiments prevailing in the investor community, earnings estimates have been improving for the struggling steelmaker. With rising demand in steel expected soon, experts expect U.S. Steel stocks to perform better in the near future.
Meanwhile, U.S. Steel’s board recently declared a $0.05 dividend per share on its common stock, payable by December 10, 2013. The steel maker’s shares rose by about 4.38% from a previous close at $25.78 on NYSE to close at $26.91 at trade close on November 04. After-hours trading saw a $0.14 dip to $26.77.
