U.S. Steel, Carpenter Join Forces - Analyst Blog
February 04 2013 - 10:30AM
Zacks
U.S. Steel (X),
the largest U.S. steel maker (by volume), has entered into a
collaboration agreement with specialty alloy maker
Carpenter Technology Corporation (CRS) to develop
lighter high-strength steel for automotive applications. The focus
of the partnership will be fuel economy and passenger safety.
The collaboration will develop Carpenter Technology’s patented
Temper Tough specialized steel alloy, geared for use in flat-roll
automotive and other demanding applications. The alloy was
originally designed for use in the aerospace industry.
The new alloy is expected to help automakers address the recently
mandated Corporate Average Fuel Requirement (CAFE) standards by
“light weighting” vehicles through mass reduction. The CAFE
regulation has been intended to improve the average fuel economy of
vehicles sold in the U.S. The Temper Tough steel alloy also offers
extremely high-strength and ductility attributes, which will
support safety needs.
U.S. Steel, on Jan 29, posted its fourth-quarter 2012 results. Its
losses narrowed 76% year over year to $50 million or 35 cents a
share in the quarter. Excluding a favorable settlement associated
with a supplier contract dispute, net loss was 41 cents a share,
below the Zacks Consensus Estimate of a loss of 75 cents.
Revenues clipped nearly 7% year over year to $4,487 million in the
quarter, yet beat the Zacks Consensus Estimate of $4,396 million.
The company faced continued economic challenges and pricing
pressure in the quarter.
Oversupply and increased steel imports into the domestic market
continues to put pressure on steel prices and impact the results of
leading U.S. steel makers like U.S. Steel, Nucor
Corporation (NUE) and AK Steel (AKS).
U.S. Steel expects its first-quarter 2013 results to be affected by
sustained economic uncertainty. The company expects near breakeven
results for its Flat-rolled segment in the first quarter and
envisions higher shipment on a sequential basis. Average spot
prices are expected to improve from the fourth quarter level while
raw material costs have been predicted to decline.
U.S. Steel currently carries a short-term Zacks Rank #3 (Hold).
AK STEEL HLDG (AKS): Free Stock Analysis Report
CARPENTER TECH (CRS): Free Stock Analysis Report
NUCOR CORP (NUE): Free Stock Analysis Report
UTD STATES STL (X): Free Stock Analysis Report
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