Shares of United States Steel Corporation (NYSE: X) were down 11.8% in morning trade on Thursday. The stock took a hit after the company issued weak guidance for the third quarter of 2019 on Wednesday evening.
United States Steel said it expects adjusted loss to be approx. $0.35 per share for the third quarter. This compares to a loss of $0.07 per share estimated by analysts. Adjusted EBITDA is expected to be approx. $115 million.
The fall in steel prices and a larger-than-expected drop in scrap prices are expected to hurt Flat-rolled earnings in the second half of 2019. The company currently plans to idle two of its blast furnaces through at least the end of the year. Based on these factors, the company expects Flat-rolled shipments to third-party customers to be approx. 10.7 million tons for the full year.
United States Steel continues to face deteriorating market conditions and pressure on margins in Europe. Due to the current market conditions and the high level of steel imports into Europe, the company does not expect to restart its idled blast furnace this year. The company also reiterated its full-year shipment guidance of approx. 3.6 million tons.
The company plans to reduce its headcount by 2,500 positions by the end of 2021 at US Steel Europe. To date, approx. 1,800 positions have been eliminated.
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The Tubular segment is expected to see pressure for the remainder of the year due to negative market conditions and high import levels. The company reduced its full-year shipment expectation to approx. 0.7 million tons due to weaker demand for oil country tubular goods product.
The weak demand, along with lower selling prices for seamless and welded pipe, are expected to have a significantly negative impact on earnings in the second half of the year.
The stock has dropped over 39% thus far this year and over 63% over the past one year.