Stelco Holdings Inc T.STLC

EPS Estimates & Prices Realized

[Jasonuw]

We've had several US Steel producers announce results (US Steel today) and their prices realized are below current spot or prices during Q3. On average I am seeing $1320 USD across the 4 Steel Producers I follow. This a result of long term contracts that the mills sign. Silver lining is the higher prices for longer rather than 1 quarter blip. If I use 1320 USD in my estimate for Q3, I see about 650 million CAD profit before tax. I have no idea what the conditions are on using the tax attributes but let's say there are 2 scenarios. 1 (No tax). EPS of $8.2 CAD per share. 2 ( 25% Tax) EPS of 6.1 CAD per share. If they had ~ 250 million in Cash at end of Q2, used 400 million to buy back 13% of the shares and now have earned 650 million ( no tax scenario). They should be sitting on 500 million of Cash on the balance sheet. About 15% of their market cap. I say that because I like limiting my downside risk. If a company has that much cash, it puts a floor on their share price. Anyways. Bottom line is EPS forecast of $8.2. Anybody else want to post their EPS estimates?

[marsman1]

Your $1320 is far too low IMO . Every company has their own stratgey as to how to sell their steel. STELCO has said , a few times that they are selling into the spot market , so that $1320 U S could easily be $1600 - $1900  U S . If so the earnings will be higer than your seniro.

[Jasonuw]

So the midpoint of your easily achieved range is 1750 USD. With a exchange rate of 79.5 cents that we saw in Q3, you're saying Stelco realized 2200 CAD on their steel? How do you figure that when Alan said Q4 might be able to go over 2000 CAD? Seems like he wasn't committing to Q3.

[fishcarrier]

I tend to agree with marsman that our steel price should be higher. 93% of Stelco steel is either coated or hot-rolled. I don't know how that compares with other steel companies, but I think favourably. I think it could be pretty close to that $2000 Canadian, or all of 1600 US.  I just took a quick look at US Steel, and their numbers should be higher. If they sold 4.1 million tons and

[dieter216]

My EPS estimate:  $7.20

[fishcarrier]

My ESP is above $8.  I assume steel sold at $600 per ton more in Q3 That would be (1292+600=)1892. In Q2 STLC earned 4.28 per share on 13% more shares.I'm going to assume the 13% will cover any exigencies unforseen. Then, 600x 679000 tons =$407,400,000 Multiply by 3/4 to cover the taxes, thus $305,550,000. Divide by 77,315,265 shares = $3.95. Add the $3.95 to Q.3's results of $4.28