NEW YORK – United States Steel Corp. (X) on Tuesday reported second-quarter profit rose 16 percent on strong results in its European and tubular products segments, but said operating results were likely to fall in the current quarter due to weaker spot prices.
U.S. Steel shares rose 2 percent as analysts were generally positive on the results.
"I think they were reasonably decent," said Charles Bradford of Bradford Research/Soleil.
But Bradford also said trends toward rising spot prices for steel did not necessarily mean stronger results, since prices have already fallen so dramatically from their highs.
"It does represent a change in direction and that's always helpful, but it doesn't mean you're going to have a good third quarter," he said.
Pittsburgh-based U.S. Steel said net earnings increased to $245 million, or $1.88 per share, from $211 million, or $1.62 per share, in the same quarter last year. Net sales rose to $3.58 billion from $3.45 billion.
Analysts polled by Reuters Estimates expected earnings per share of $2.17 on revenue of $3.56 billion.
The company said third-quarter flat-rolled average realized prices should be "moderately lower" than second-quarter levels, while its European operation would see average realized prices "significantly lower" in the third quarter on declining hot- rolled spot prices.
Earlier Tuesday, AK Steel (AKS) said its own average selling prices would be lower in the third quarter, although it forecast spot market prices would start rising in the third quarter and continue on in the fourth quarter.
U.S. Steel shares were up 2.4 percent at $42.63 on the New York Stock Exchange (search). AK Steel shares were up 3.2 percent at $9.34.
Separately, U.S. Steel declared a quarterly dividend of 10 cents per share, payable Sept. 10 to shareholders of record as of Aug. 17 and said its board approved a buyback of up to 8 million shares of common stock.