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Rolls of steel sheet.

Allison Farrand/Bloomberg

 


U.S. Steel

stock was soaring in after-hours trading after the company not only crushed third-quarter earnings expectations but also raised its dividend.

U.S. Steel stock was up more than 8.2% in premarket trading Friday after rising 0.3% in regular trading Thursday. The

S&P 500
and

Dow Jones Industrial Average
gained 1% and 0.7%, respectively.

U.S. Steel reported $5.36 in adjusted in per-share earnings on $6 billion in sales. Wall Street had been looking for earnings of $4.87 a share and $5.8 billion in sales.

The company shipped 4.1 million tons of steel in the third quarter, up from 3 million tons a year ago.

Management struck an upbeat tone in its news release. “We continue setting records, including record net earnings, record Ebitda, record Ebitda margin, record liquidity, record safety, and record quality and reliability,” said CEO David Burritt. “Our balance sheet has been transformed and the cash flow generation of the business has us highly confident in our ability to pre-fund organic growth investments.”

Separately, the company announced it would buy back $300 million in stock and hiked the quarterly dividend to 5 cents a share from 1 cent.

The earnings and dividend news—and the initial stock price reaction—are positive for shareholders who have watched U.S. Steel stock meander over recent months. As of Thursday’s close, shares were up about 38% year to date. But shares are down about 6% over the past three months.

That pattern tracks with steel prices. Prices for hot-rolled coil—a key benchmark—are up roughly 75% year to date, but are down about 5% over the past three months. Commodity prices often determine what happens to commodity-related stocks, at least in the short-run.

Management hosts a conference call Friday morning at 8:30 a.m. Eastern time to discuss results.

Write to Al Root at [email protected]

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