The Zacks Analyst Blog Highlights: United States Steel, Century Aluminum, Noranda Aluminum Holding and RTI International Metals
CHICAGO, Oct. 28, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the United States Steel Corp. (NYSE:X-Free Report), Century Aluminum Co. (Nasdaq:CENX-Free Report), Noranda Aluminum Holding Corp. (NYSE:NOR-Free Report) and RTI International Metals, Inc. (NYSE:RTI-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday's Analyst Blog:
Will U.S. Steel Beat Q3 Earnings Estimates?
United States Steel Corp. (NYSE:X-Free Report) is set to release its third-quarter 2014 results after the bell on Oct 28. Last quarter, the steel company delivered a 151.52% positive surprise.
U.S. Steel has missed the Zacks Consensus Estimate in 1 of the trailing 4 quarters with an average positive surprise of 103.68%. The Zacks Consensus Estimate for U.S. Steel for the third quarter has gone up 1.7% since the last 7 days and now stands at $1.17 per share.
Let's see how things are shaping up for this announcement.
Factors to Watch For
U.S. Steel is actively engaged in improving its cost structure and increasing revenues on a sustainable basis through its "Carnegie Way" initiative that includes shutdown of operations, manufacturing process/logistics improvements and savings on SG&A costs. These efforts are expected to deliver $435 million (up from $290 million expected earlier) in cost and margin improvements in 2014, most of which is likely to be realized in the Flat-rolled segment. The company also expects roughly $700 million in additional cash flow benefit in 2014 from working capital improvement and tax reduction with $650 million being already realized in first half.
U.S. Steel expects a significant improvement in its third-quarter operating income from its reportable segments and other businesses. Moreover, the company's operations performed well and steel market conditions in the U.S. have remained stable. As a result, the company anticipates results, adjusted for some one-time charges to be considerably higher than the current consensus.
U.S. Steel also decided to discontinue an expansion of its iron ore pellet operations in Keewatin, MN, and also stated that it will forgo further construction of carbon alloy operations at its Gary, IN, location. These moves will allow it to redirect funding to other projects.
U.S. Steel is continuing with its efforts to implement an enterprise resource planning (ERP) system to replace its existing information technology system, which will enable it to operate more efficiently. The completion of the ERP project is expected to provide further opportunities to streamline, standardize and centralize business processes in order to maximize cost effectiveness, efficiency and control across its global operations. The company is also developing additional projects within its Tubular segment, such as facility enhancements and additional premium connections that will further improve its ability to support Tubular customers' evolving needs.
U.S. Steel is seeing a decline in costs associated with its pension and other post-employment benefits (OPEB) plans. The funded status of its pension and OPEB plans has improved considerably, aided by the economic recovery. Pension and OPEB obligations are a significant part of U.S. Steel's cost and capital structure and the company expects its costs to be down by over $100 million year over year in 2014.
Earnings Whispers
Our proven model shows that U.S. Steel has the right combination of two key ingredients to beat earnings.
Positive Zacks ESP: The Earnings ESP (Expected Surprise Prediction) for U.S. Steel is +10.26% - the difference between the Most Accurate estimate of $1.29 and the Zacks Consensus Estimate of $1.17. This indicates a likely positive earnings surprise.
Zacks Rank #2 (Buy): U.S. Steel's Zacks Rank #2 increases the predictive power of its ESP. Note that stocks with Zacks Ranks of #1, 2 and 3 have a significantly higher chance of beating earnings. Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
Stocks That Warrant a Look
Here are some other steel and metals companies you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:
Century Aluminum Co. (Nasdaq:CENX-Free Report) has an earnings ESP of +11.76% and a Zacks Rank #1.
Noranda Aluminum Holding Corp. (NYSE:NOR-Free Report) has an earnings ESP of +83.33% and a Zacks Rank #2.
RTI International Metals, Inc. (NYSE:RTI-Free Report) has an earnings ESP of +11.77% and a Zacks Rank #3 (Hold).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Get the full Report on X - FREE
Get the full Report on CENX - FREE
Get the full Report on NOR - FREE
Get the full Report on RTI - FREE
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Logo - http://photos.prnewswire.com/prnh/20101027/ZIRLOGO
SOURCE Zacks Investment Research, Inc.
Share this article