POSCO (NYSE:PKX) Posts Earnings Results, Misses Expectations By $0.57 EPS

POSCO (NYSE:PKX) announced its quarterly earnings data on Monday. The basic materials company reported $0.59 EPS for the quarter, missing analysts’ consensus estimates of $1.16 by ($0.57), FiscalAI reports. The firm had revenue of $14.10 billion during the quarter, compared to analyst estimates of $13.51 billion. POSCO had a return on equity of 1.99% and a net margin of 1.79%.

Here are the key takeaways from POSCO’s conference call:

• Q3 operating profit rose to KRW 945 billion, up 15% quarter over quarter and 48% year over year, marking three consecutive quarters of improvement. Revenue was KRW 19.1 trillion, with steel the primary earnings driver.
• POSCO’s steel operating profit increased to KRW 455 billion as higher selling prices, stronger production utilization, and energy and labor cost reductions offset a 4.4% quarter-over-quarter rise in key raw-material costs. Infrastructure also improved, including a 24% year-over-year operating-profit increase at POSCO International.
• The lithium-materials businesses posted losses as lithium prices fell, inventory valuation losses reached KRW 29 billion, weather and maintenance reduced Argentina output, and high-cost feedstock pressured margins. Management expects some lithium operations to reach profitability next year, but Argentina Plant 2 is not expected to contribute operating profit during its initial ramp-up.
• Scheduled relining and related maintenance at Pohang Blast Furnace No. 2 will reduce crude-steel production and sales by roughly 430,000 tons through the fourth quarter and first quarter of 2027, although management expects operations to normalize after Q1.
• Net debt fell KRW 4.3 trillion quarter over quarter, reducing the net debt-to-equity ratio to 18.4% after asset sales and operating cash generation. POSCO also advanced its growth strategy through LFP cathode expansion, completion of Argentina’s second lithium plant, and the acquisition of Marcellus shale-gas assets.

POSCO Stock Up 5.5%

Shares of POSCO stock opened at $52.42 on Monday. POSCO has a 52-week low of $48.50 and a 52-week high of $92.40. The company has a debt-to-equity ratio of 0.30, a quick ratio of 1.37 and a current ratio of 1.98. The business’s 50 day simple moving average is $57.54 and its 200 day simple moving average is $61.13. The firm has a market cap of $15.86 billion, a PE ratio of 19.77 and a beta of 1.75.

Wall Street Analyst Weigh In

PKX has been the subject of a number of analyst reports. Zacks Research lowered shares of POSCO from a “strong-buy” rating to a “hold” rating in a report on Tuesday, September 29th. Weiss Ratings lowered POSCO from a “hold (c-)” rating to a “sell (d+)” rating in a research report on Friday, October 9th. Finally, Wall Street Zen upgraded POSCO from a “hold” rating to a “buy” rating in a report on Saturday, August 1st. One research analyst has rated the stock with a Buy rating, one has issued a Hold rating and one has given a Sell rating to the company’s stock. According to data from MarketBeat, the company presently has an average rating of “Hold”.

POSCO Company Profile

POSCO is a South Korean steel producer and one of the world’s major integrated steelmakers. The company manufactures a broad range of steel products, including hot- and cold-rolled steel, heavy plate, wire rod, stainless steel, galvanized steel, automotive steel and electrical steel.

POSCO operates large integrated steelworks in Pohang and Gwangyang, South Korea. Its products are used in automobiles, shipbuilding, construction, energy infrastructure, appliances and other industrial applications.