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U.S. Steel (X) Ups FY18 View on Tariffs & Plant Reopening

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United States Steel Corporation X has updated its full-year 2018 guidance.

For the year, U.S. Steel now expects EBITDA of roughly $1.7 billion (up from roughly $1.5 billion expected earlier), considering the potential market conditions resulting from the Section 232 actions and increased shipments from Granite City Works. It expects EBITDA to be roughly $250 million for the first quarter of 2018.

Per the company, the updated guidance primarily considers two factors. These are the market dynamics related to the President Trump’s recent decision to impose 25% tariff on steel imports following the U.S. Department of Commerce’s Section 232 investigation, and the recently announced restart of one of the two blast furnaces and steelmaking facilities at Granite City Works.

U.S. Steel expects the impact of the Section 232 on market conditions to become clearer over the next several months, which could affect its results. Moreover, once the restarting process is completed, U.S. Steel expects roughly 100,000 tons of incremental shipments per month from Granite City Works. The company expects the benefits from these actions to be mainly reflected in its results in the second half of this year.

Shares of U.S. Steel have soared 37.3% in the past three months, outperforming the industry’s 12.5% growth.


Zacks Rank & Stocks to Consider

U.S. Steel currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are CF Industries Holdings, Inc. CF, LyondellBasell Industries N.V. LYB and Kronos Worldwide Inc KRO, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CF Industries has an expected long-term earnings growth rate of 8%. Its shares have soared 29.4% over the last six months.

LyondellBasell has an expected long-term earnings growth rate of 9%. Its shares have gained 17.7% over the past six months.

Kronos has an expected long-term earnings growth rate of 5%. Its shares have moved up 10.8% over the last six months.

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