U.S. Steel Corp. forecast first quarter earnings below analyst estimates after softer demand for the metal pulled prices down from last year’s highs. Shares slumped.
The Pittsburgh-based company forecast adjusted earnings of $2.96 to $3 per share, below the Bloomberg analyst consensus estimate of $3.77. Average prices for steel so far this quarter are down more than 30% from the last three months of the year, dragging down earnings for U.S. producers.
“At the beginning of the year, we communicated expected market softness for the first quarter, along with the normal seasonal impacts related to our mining operations,” Chief Executive David Burritt said in a statement. “We expect improving market conditions to continue into the second quarter.”
The announcement comes after competitor Nucor Corp., the largest U.S. producer, also gave a weaker-than-expected earnings outlook, citing reduced profits from its steel mill output. The first quarter of the year is typically slower for steel companies as construction doesn’t begin to pick up until the spring.
Shares sank as much as 5.6% in trading after regular exchange hours, and were down 3.8% at 4:36 p.m. in New York.
