U.S. Steel (X) Q1 Earnings Preview

Shares of United States Steel Corp. (NYSE: X) are down 4% ahead of Q1 earnings due before the open tomorrow. On average analysts are looking for a loss of $1.69 per share on revenues of $3.14 billion.

This will be the company's first quarterly loss in some time, but was well telegraphed. This quarter will be all about the outlook and what signs, if any, they are seeing that things are starting to turn.

We think there is a chance for a smaller-than-expected loss for the quarter due to lower input costs and with the recent "green shoots" noted around the country, there is even a chance the company could be cautiously optimistic. Shares of U.S. Steel are down 21% since Q4 results at the end of January, so much of the difficult operating environment is well priced-in. But that said, the stock has rallied 66% off the March $16.66 bottom (wow that's a lot of 6s!). So, all-in-all investors will likely be happy with a smaller loss, but won't likely rally the stock anymore unless the company gives some serious visibility into things improving. There is risks to the downside if the loss is bigger than expected and guidance is foggy.

Here is what analysts are saying ahead of the results:

Deutsche Bank: "We expect U.S. Steel to report 1Q09 EPS loss of $1.47 which compares with a Street estimate loss of $1.69."

Citigroup: "Based on continuing depressed industry steel mill utilization rates and recent weakness in steel prices, we are lowering our '09 estimate to -$1.48 from -$0.48. We estimate 1Q EPS of -$1.50 on revenues of $2,860 mln and EBITDA of -$41 mln." On guidance, Citi's analysts said, "US Steel will likely provide qualitative guidance for each of the company's operating segments. Currently we estimate Q2 EPS of - $0.65 vs. the consensus of -$1.21."

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