U.S. Steel posts weak Q1 profit forecast on lower demand in tubular segment
Reuters
Published Mar 18, 2024 09:45
(Reuters) - U.S. Steel, whose deal to be bought by Japan's Nippon Steel has run into political resistance, including from President Joe Biden, forecast first-quarter earnings below estimates on Monday due to lower demand in its tubular business.
The company's tubular business produces steel casing and tubing, line pipes and mechanical tubing, catering to customers primarily in the oil, gas and petrochemical markets.
"Lower selling prices are expected to negatively impact the segment's financial performance. Additionally, lower shipment volumes are anticipated as rig counts remain stagnant and natural gas demand softens due to a mild winter," U.S. Steel said.
The company forecast first-quarter adjusted earnings per share between 80 cents and 84 cents per share, below analysts' average estimate of 89 cents per share, according to LSEG data.
The weak profit outlook comes at a time when Nippon's $14.9-billion deal to acquire U.S. Steel has run into opposition from lawmakers in the United States, who have cited national security concerns.
The opposition peaked last week, after President Biden said the company must remain a domestically owned U.S. firm.
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Written By: Reuters
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