POSCO (NYSE:PKX) Announces Quarterly Earnings Results

POSCO (NYSE:PKX) issued its quarterly earnings results on Thursday. The basic materials company reported $1.30 earnings per share for the quarter, topping the consensus estimate of $0.85 by $0.45, Zacks reports. POSCO had a return on equity of 1.34% and a net margin of 1.19%.The company had revenue of $12.43 billion for the quarter, compared to the consensus estimate of $12.05 billion.

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

• Second-quarter earnings improved: Consolidated revenue rose to KRW 19.3 trillion and operating profit increased 16% quarter over quarter to KRW 819 billion, with gains across steel, rechargeable battery materials and energy.
• POSCO Argentina’s lithium operation achieved its first-ever quarterly operating profit, while the broader rechargeable battery materials segment returned to surplus after eight consecutive quarters of losses. Management expects a stronger fourth quarter as Plant 1 returns to full operation, certified-product sales begin and Plant 2 ramps up.
• Steel profitability is expected to improve in the third quarter through higher production, sales volumes, pricing and fixed-cost absorption, although raw-material, energy, foreign-exchange and trade-policy volatility remain significant risks. POSCO is gradually pursuing price increases across automotive, shipbuilding and electronics markets.
• Restructuring generated KRW 475.4 billion of additional cash in the first half, aided by divestments of loss-making Chinese steel assets; management targets KRW 3.5 trillion in cumulative free cash flow by 2028. POSCO International also posted record quarterly and half-year operating profit.
• Lithium performance remains uneven, with the Pilbara hard-rock operation pressured by unfavorable spodumene-to-lithium-hydroxide price spreads and Argentina facing a temporary third-quarter production slowdown for equipment repairs. The group also reported another fatality at POSCO E&C and continues to face European quotas, anti-dumping investigations and tariffs affecting steel exports.

POSCO Stock Performance

Shares of POSCO stock traded down $1.39 on Friday, hitting $53.10. The stock had a trading volume of 365,646 shares, compared to its average volume of 288,884. The stock has a market cap of $16.06 billion, a price-to-earnings ratio of 31.39 and a beta of 1.57. The company has a current ratio of 1.90, a quick ratio of 1.30 and a debt-to-equity ratio of 0.28. POSCO has a 52-week low of $44.99 and a 52-week high of $92.40. The company’s 50 day moving average price is $58.00 and its 200 day moving average price is $62.82.

Hedge Funds Weigh In On POSCO

Institutional investors have recently modified their holdings of the business. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC acquired a new stake in shares of POSCO during the fourth quarter worth about $25,000. Allworth Financial LP lifted its position in POSCO by 51.6% during the 3rd quarter. Allworth Financial LP now owns 682 shares of the basic materials company’s stock worth $34,000 after acquiring an additional 232 shares during the period. Headlands Technologies LLC grew its stake in shares of POSCO by 1,276.9% in the 2nd quarter. Headlands Technologies LLC now owns 1,432 shares of the basic materials company’s stock valued at $69,000 after purchasing an additional 1,328 shares during the last quarter. Inspire Investing LLC acquired a new position in shares of POSCO in the fourth quarter valued at approximately $85,000. Finally, Raymond James Financial Inc. purchased a new stake in shares of POSCO during the second quarter worth approximately $95,000.

Wall Street Analyst Weigh In

PKX has been the topic of several analyst reports. Zacks Research raised shares of POSCO from a “strong sell” rating to a “hold” rating in a report on Monday, June 8th. UBS Group raised shares of POSCO from a “neutral” rating to a “buy” rating in a research report on Monday, April 27th. Wall Street Zen cut shares of POSCO from a “buy” rating to a “hold” rating in a research report on Saturday, June 20th. Finally, Weiss Ratings downgraded shares of POSCO from a “hold (c-)” rating to a “sell (d+)” rating in a research note on Tuesday, June 23rd. One analyst has rated the stock with a Buy rating, one has assigned a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat.com, the stock has an average rating of “Hold”.

About POSCO

POSCO (NYSE: PKX) is a South Korea–based integrated steel producer founded in 1968 as Pohang Iron and Steel Company. Headquartered in Pohang, the company grew rapidly as part of South Korea’s industrialization program and developed large, integrated steelworks—most notably in Pohang and Gwangyang—that helped establish POSCO among the world’s largest steelmakers. It is structured as a diversified industrial group with steelmaking at its core and a range of downstream and trading businesses.

The company’s primary activities include ironmaking and steelmaking, producing a wide array of steel products such as hot-rolled and cold-rolled sheets, coated steels, plates, stainless and special steels, long products (bars and wire rods), and seamless pipes.