POSCO (NYSE:PKX) Announces Quarterly Earnings Results, Beats Expectations By $0.45 EPS

POSCO (NYSE:PKX) issued its quarterly earnings data on Thursday. The basic materials company reported $1.30 earnings per share for the quarter, beating the consensus estimate of $0.85 by $0.45, Zacks reports. POSCO had a net margin of 1.19% and a return on equity of 1.34%. The firm 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 Price Performance

Shares of NYSE PKX traded down $1.32 during mid-day trading on Friday, reaching $53.17. 382,145 shares of the company traded hands, compared to its average volume of 288,936. POSCO has a fifty-two week low of $44.99 and a fifty-two week high of $92.40. The company has a debt-to-equity ratio of 0.28, a current ratio of 1.90 and a quick ratio of 1.30. The firm has a market cap of $16.08 billion, a PE ratio of 31.44 and a beta of 1.57. The stock has a fifty day simple moving average of $58.00 and a 200-day simple moving average of $62.82.

Institutional Inflows and Outflows

Several hedge funds have recently added to or reduced their stakes in the business. Compound Planning Inc. lifted its position in shares of POSCO by 15.4% during the 4th quarter. Compound Planning Inc. now owns 8,247 shares of the basic materials company’s stock valued at $439,000 after acquiring an additional 1,100 shares during the last quarter. Corient Private Wealth LLC grew its holdings in shares of POSCO by 17.0% in the 4th quarter. Corient Private Wealth LLC now owns 30,097 shares of the basic materials company’s stock worth $1,575,000 after acquiring an additional 4,364 shares during the last quarter. Summit Global Investments raised its position in shares of POSCO by 19.0% during the fourth quarter. Summit Global Investments now owns 12,093 shares of the basic materials company’s stock worth $643,000 after purchasing an additional 1,929 shares during the period. Empowered Funds LLC acquired a new stake in shares of POSCO during the fourth quarter worth $9,223,000. Finally, XTX Topco Ltd purchased a new stake in shares of POSCO during the fourth quarter valued at $475,000.

Wall Street Analysts Forecast Growth

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

POSCO Company Profile

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.