Aug. 7, 2014
U.S Steel Reports 2Q Loss
United States Steel Corp., Pittsburgh, reported a net loss of $18 million in the second quarter, an improvement from the $78 million lost in second-quarter 2013, but a fallback from the $52 million earned in the previous quarter. Net sales for the second quarter totaled about $4.4 billion, a small decrease from the first quarter and the same quarter last year. Net sales for the first six months totaled $8.85 billion, down from $9.02 billion in first-half 2013.
U.S. Steel shipped a total of 5.03 million tons of steel in the quarter, down from 5.12 million tons in the first quarter and 5.25 million tons in second-quarter 2013. For the year to date, its global steel shipments totaled 10.15 million tons, down from 10.74 million in the first half last year.
The company attributed declines in its Flat-rolled business to the effects of the extraordinary weather conditions and operational issues that began in the first quarter, which resulted in higher operating costs and lower shipments in the second quarter.
"The Carnegie Way journey continues to drive improvements as we reported operating income for each of our reportable segments and Other Businesses despite significant operating inefficiencies and logistical issues in our Flat-rolled segment," said U.S. Steel President and CEO Mario Longhi. "The extreme weather conditions at the start of the year impacted numerous industry statistics such as steel production, service center shipment volumes, and construction starts. Just getting materials moved around the country proved to be an extraordinary task, which likely dampened expectations as to the underlying strength of the economy."
Looking ahead to the third quarter, the company expects its Flat-rolled segment to improve significantly as operations return to normal and shipments increase. Realized prices are expected to remain consistent with the second quarter. Inventory levels are expected to increase during the balance of the year as the company works to replenish its supply chain.
U.S. Steel also expects its Tubular results to improve slightly from the second quarter. Shipments are expected to decrease due to the indefinite idling of the McKeesport and Bellville facilities, but average realized prices are projected to increase due to improved pricing and mix. The ITC ruling on the OCTG trade case expected in mid-August will not be in time to benefit the third-quarter results.