Shares of U.S. Steel Corp. (NYSE: X) and Hercules Inc. (NYSE: HPC) soared Tuesday after the former reported that its third-quarter profits more than tripled and the latter said during its Q3 report that the necessary regulatory approval had been received for its acquisition by rival chemical company Ashland Inc. (NYSE: ASH).
Pittsburgh-based U.S. Steel reported the most profitable quarter in its history as higher prices led to record gains in its tubular and flat-rolled steel businesses. Its net income totaled $919 million, or $7.79 per share, in the quarter, which was 70.8% higher than a year earlier, and quarterly sales soared 68% to $7.31 billion. Excluding one-time charges related to a union labor agreement and environmental remediation, U.S. Steel earned $8.79 per share.
Analysts polled by Thomson Reuters, on average, had predicted earnings of $7.09 per share on revenue of $7.2 billion.
The company warned that the volatile global economic climate could hurt results for the rest of the year. Steel prices have deteriorated globally in recent weeks as demand has slowed.
After falling to a 52-week low on Tuesday morning, shares rose 14.2% to close at $35.20. Shares are down 70.8% year to date.
Wilmington Del.-based Hercules reported late Monday that its earnings fell 16.7% from a year ago to $39.5 million, or 35 cents per share, for the quarter ended Sept. 30. Excluding a charge related to its pending acquisition by Ashland and other one-time events, Hercules made $42.4 million, or 38 cents per share. Sales rose 11% to $605.8 million.
Analysts surveyed by Thomson Reuters had expected earnings of 39 cents a share on revenue of $600 million. The results typically exclude one-time gains and losses.
Hercules shareholders are scheduled to vote Nov. 5 on the deal with Ashland.
Shares rose 27.1% Tuesday to close at $16.98. That's down 12.3% year to date, but up from the 52-week low of $12.59 reached earlier in the month.
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