Add America's steelmakers to those looking to President Obama for change -- though the change might not be as much as investors and companies had hoped for.

Four major steel players -- Steel Dynamics, U.S. Steel, AK Steel and Nucor -- report quarterly results over the next two days. By all accounts, the results are expected to be bad. Some results could even be atrocious, analysts warn.

Yet beyond the ongoing gloom lies the promise of a stimulus plan, expected to plunk about $30 billion into roads and bridges and $32 billion into energy transmission, among other expenses.

No one knows how long it will take for real stimulus spending to reach the steel companies' profit statements. That's because no one knows how long Congress will hash out the spending plan or over how many years lawmakers will disburse taxpayer largess.

Nevertheless, the prospect of a massive effort repairing, rebuilding and improving everything from roads and bridges to the nation's electrical grid "is what the industry is holding on to for 2009," says Timna Tanners, an analyst at UBS Securities. "There's nothing else to look to."

Ms. Tanners, for one, says stimulus expectations might be more hope than promise: The amount of money being allocated to roads and bridges, for instance, is smaller than the industry had hoped for, "and there's a question about timing. Some are saying the money will be spread out over 10 years instead of two or three. If so, a few billion a year, while better than nothing, is sort of a yawn."

Deeply depressed stock prices show the market doesn't have much confidence in the future just yet. Price-to-earnings ratios are less than two for some steelmakers, well under five-year averages in the high single digits.

To a certain degree, all steelmakers would benefit from a stimulus plan, assuming demand pushes steel prices higher overall. However, each steel company has its particular strengths. Thus, the question: Which companies might benefit the most from whatever plan emerges?

Nucor is a key player in rebar, beams and thick-gauge steel plate, which are necessary for the roads and bridges that would likely be a part of any stimulus plan. Steel Dynamics has some exposure to beams. The steel produced by U.S. Steel and AK Steel is used more often in autos and consumer durables, which are unlikely components of a stimulus plan. AK Steel, however, has an edge in a specialty steel used in the electrical industry, which could benefit if lawmakers' efforts emphasize the nation's taxed electrical grid.

Analysts expect Steel Dynamics to report a loss for the quarter of as much as 42 cents a share after posting solid gains a year earlier. AK Steel is also expected to post a loss, of a penny a share. Some analysts warn that U.S. Steel could report a loss of more than $1 a share, though on average analysts expect the company to earn 93 cents.

Only Nucor is universally expected to post a profit, though, at an anticipated 13 cents a share on average, that profit would be down nearly 90% from a year earlier.

For steel companies looking to rebuilding the income statement and balance sheet, rebuilding America can't come fast enough.

Source: The Wall Street Journal, January 26, 2009