Nov. 23, 2016

U.S. Steel Reports Strong Quarter

U.S. Steel Corp., Pittsburgh, claimed its best quarterly results since 2014. The steelmaker reported net earnings of $51 million in the third quarter, a big improvement from the $46 million lost in the prior quarter and the $173 million loss in third-quarter 2015. Its third-quarter sales totaled $2.69 billion, up from $2.58 billion in the second quarter, but down from $2.83 billion in the prior-year period.

"Our third-quarter results improved significantly from the second quarter as each of our segments improved, resulting in our highest quarterly segment income since the fourth quarter of 2014. We faced some operational challenges that limited our ability to realize the full benefits of an improved pricing environment, but we continued to make progress in our Carnegie Way transformation efforts,” said U.S. Steel President and CEO Mario Longhi.

U.S. Steel’s Flat-Rolled segment benefited from increased spot and contract prices in the third quarter, but operational issues slowed shipments. In the last half of the third quarter, the company experienced unplanned outages at several of its steelmaking and finishing facilities, cutting shipments by an estimated 125,000 tons. A planned outage and lower operating rates at its mining operations also affected its results, the company said.

Results in U.S. Steel’s European segment improved from the second quarter due to higher average realized euro-based prices, partially offset by higher iron ore costs. Third-quarter results for the company’s Tubular segment increased compared to the second quarter, but continued to reflect very low utilization rates in a low price environment.
Barring a change in market conditions, U.S. Steel forecasts a net loss for the year of approximately $355 million.

"As we move through the rest of 2016, operational issues remain a headwind for us. We have identified the critical assets that require additional capital investment and increased maintenance spending to improve our reliability and quality and to lower our costs. We plan to use our strong cash and liquidity position to expedite the revitalization of our facilities and to fund additional growth projects,” Longhi said.


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Wednesday, October 18, 2017