Tuesday, July 27, 2010

U.S. Steel (NYSE:X) Losses Confirm Slow Economy

United States Steel Corp. (NYSE:X) reported a second-quarter loss, even though they were able to double sales during the quarter over last year.

Considering the deep recession last year, that isn't an unexpected result, and doesn't say much to the performance of the company or an improved economy.

US Steel did attempt to spin the results as a "sharp turnaround," which when comparing numbers is true, but again, needs to really be compared with numbers in a healthy economy to give an accurate measurement of the their performance.

Losses for the quarter came to $25 million, or 17 cents a share, a definite improvement over the loss of $392 million last year during the same quarter, or $2.92 a share.

Even with sale doubling to $4.68 billion, it shows margins were low and the ability to raise prices minimal. The company stated the increased revenue was also hindered by operating expenses, which had almost doubled over the same quarter in 2009.

Guidance wasn't very impressive from the steel giant either, as they did say they expect to generate a profit in the third quarter, but falling orders and lower steel prices will have operating results underperform.

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