US Steel Pumped By Oil, NBK Hit in the Ball Bearings
Steel shipments up as the world builds oil rigs
Funny times: better to be a steel maker than an oil company in these days of rising energy prices. Compare the lackluster response to BP ( BP ) today with the rise in shares of US Steel ( X ), the world's fifth-largest metal maker. US Steel's shares were one of the biggest gainers on the NYSE this afternoon, rising almost 14%, or $20.49, to $165.82, after the company said sales surged 58% year-over-year to $6.7 billion , beating estimates of $5.9 billion. Earnings per share, excluding a 3-cent one-time cost, were $5.65, handily surpassing an average estimate of $3.91. On the conference call with analysts, US Steel explained that global oil drilling is contributing to an $800-per-ton increase in tubular steel, used to make oil rigs. “The 2008 drilling programs remain strong, and in fact the rig count recently reached a 20-year high. Activity in the energy markets should continue to support good demand for our tubular products,” said Chair and CEO John Surma. Sales and profit were the highest for any quarter in the company's history, Surma noted, and “We expect another excellent quarter,” thanks to rising prices, he added. Steel price increases should offset rising materials costs, Surma said, resulting in a substantial increase in sales for the flat-rolled and tubular steel products, while results will be lower for the company's European division, said Surma. The company increased its quarterly dividend 5 cents to $.30, for a 50% dividend increase year-to-date, said management.
Not enough wind for NBK's sales
Here's one way not to play renewable energy: a wind-energy technology supplier that's tied to old-economy weakness. Ball-bearing manufacturer NBK ( KDN ) this morning reported second quarter sales and profit ahead of estimates , but the company's CEO indicated trouble ahead based on push-outs of non-wind energy sales. NBK shares are the third highest decliner on the NYSE today, down 14%, or $8, to $48.03. Sales in the second quarter rose 24% year-over-year to $140 million, ahead of a $132-million estimate, while profit of 64 cents per share beat the average estimate on the Street by a penny, helped . Backlog was way up, too, by 61%, to $324 million, a second-quarter backlog record, the company declared. James O'Leary, chair and CEO, said in the company's statement that sales of ball bearings are growing nicely and should expand significantly next year: “We expect wind energy revenues during 2008 to approximate $90 million which compares to $32.8 million in 2007,” he said. However, push-out of ball-bearings and other mechanical parts to the broader industrial and military market may be delayed from this year to next, he cautioned. He also hinted at higher energy costs, saying the company's ability to defray “input costs” will become more difficult if costs keep going higher. Overall, the company hopes wind energy-related sales to balance out the bad stuff, leading to “a record year for revenues, net income and earnings per share,” without providing specific numbers.
本文转自：China Industry News