Shares of U.S. Steel (NYSE: X) jumped more than 4.3% during the after-market trading session on January 27, after the steel company reported 119.4% growth in net sales. However, Q4 earnings missed analysts’ expectations.
Adding to investors’ enthusiasm, the company announced a new share repurchase program worth $500 million concurrent with the earnings results.
Mixed Q4 Results
Positively, revenues more than doubled year-over-year to $5.62 billion and exceeded consensus estimates of $5.44 billion.
On the downside, adjusted earnings of $3.64 per share were much lower than analysts’ expectations of $4.41 per share. However, the earnings significantly improved compared to a loss of $0.27 per share reported for the prior-year period.
New Buybacks of $500M
In Q4, the company bought back shares worth $150 million under the $300 million stock buyback authorization announced in October 2021.
Notably, the Board has authorized an additional new $500 million stock repurchase program starting in the first quarter of 2022.
This is over and above the previously announced $300 million repurchase authorization and $0.05 per share quarterly dividend payable on March 8 to shareholders on record as of February 7.
CEO Comments
U. S. Steel CEO, David B. Burritt, commented, “We enter 2022 from a position of strength and are relentlessly focused on continuing our disciplined approach to creating stockholder value. Our balance sheet has been transformed, record cash significantly de-risks strategy execution, and our capital allocation priorities have enhanced direct stockholder returns. We are a fundamentally different company from a year ago and expect 2022 to be another strong year.”
Analysts Recommendation
Consensus among analysts is a Hold based on 1 Buy, 2 Holds, and 1 Sell. The average United States Steel stock price projection of $32.50 implies 74.83% upside potential to current levels.
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