U.S. Steel earnings lag despite boost from tariffs
U.S. Steel on Wednesday reported lackluster financial results despite getting a lift from the Trump administration's tariffs on foreign steel and aluminum imports.
The company reported net income of $592 million revenue on $3.69 billion in revenue for the fourth quarter, shy of analyst forecasts of $3.75 billion. Earnings per share also came up short. For the year, U.S. Steel reported profit of $1.12 billion on revenue of $14.18 billion.
U.S. Steel shares feel nearly 7 percent after the close of trading.
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American steelmakers have benefited from U.S. tariffs on imported steel, which have decreased competition and allowed domestic producers to raise their prices.
President Donald Trump tweeted this week that steel and aluminum tariffs have "totally revived our Steel Industry." In addition to creating domestic jobs, expanding new plants and contributing to the U.S. Treasury, the levies are "A BIG WIN FOR U.S.," he said.
Bolstered by tariffs last March, U.S. Steel is ramping up production in its Granite City, Illinois, facility, buying back $300 million in shares to reallocate assets, and driving sales through the U.S. energy industry.
The company's shares are up nearly 22 percent this year. But they remain well below the price when the Trump administration imposed the tariffs in early 2018, with investors looking for faster growth given U.S. Steel's market advantage.
Slowing global demand
Though U.S. Steel CEO David Burritt said in the company's November earnings call that he remains "optimistic" that the tariffs on foreign steel will remain in place, that will be closely watched in this week's trade talks between the U.S. and China.
Tariffs have helped support U.S. steel prices, but global prices have dropped because of reduced demand in China as its economy slows, said Derek Hernandez, research analyst at Seaport Global Securities. "How it plays forward has more to do with economic results and forecasts for China," he said.
-- The Associated Press contributed to this report
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