Chesterton Tribune

US Steel posts net loss in 2010 of $482M; half the 2009 loss

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By KEVIN NEVERS

U.S. Steel Corporation (USS) is reporting a net loss last year of $482 million or $3.36 per diluted share, compared to $1.401 million or $10.42 in 2009.

USS also posted a net loss in the fourth quarter of $249 million or $1.74 per diluted share, compared to a net loss in the third quarter of $51 million or 35 cents and a net less in the year-ago period of $267 million or $1.86.

“We reported a modest improvement in our fourth quarter operating results in comparison to the third quarter mainly due to reduced spending for facility repair and maintenance, including structural repairs and inspections, and a net gain related to asset sales,” USS Chair and CEO John Surma said in a statement released today. “The improvements were partially offset by decreases in realized prices and a reduction in total shipments, reflecting soft steel market conditions during most of the quarter and the traditional seasonal downtime take by some of our customers during the latter part of the season.”

Items not allocated to segments in the fourth quarter increased net income by $11 million or 7 cents per diluted share; in the third quarter, decreased net income by $15 million or 11 cents; and in the year-ago period, decreased net income by $31 million or 21 cents.

USS also posted a foreign currency loss in the fourth quarter which reduced net income by $33 million or 23 cents per diluted share; a foreign currency gain in the third quarter which increased net income by $139 million or 96 cents; and a foreign currency loss in the year-ago period which decreased net income by $11 million or 7 cents.

Outlook

“We expect to report a modest improvement on reportable segment results in comparison to the fourth quarter 2010,” Surma said. “Order rates for most customers groups and publicly reported spot market prices began to increase later in the fourth quarter and we remain cautiously optimistic that global economic conditions will continue to improve in the first quarter.”

Outlook for Flat-rolled

“Flat-rolled results for first quarter 2011 are expected to improve compared to the fourth quarter 2010 as the benefits of increased average realized prices, shipments, and production volumes are expected to be partially offset by higher raw material costs, primarily for scrap and coal,” USS said.

“Average realized prices are expected to increase from fourth quarter 2010 as we expected to begin realizing the benefits of increasing the spot and some market-based contract prices throughout the firs quarter,” USS also said. “Increases in some of our index-based contract prices should be realized in the second quarter as higher published market price assessments enter the index calculations.”

“Raw steel capability utilization is expected to increase from the fourth quarter of 2010 as all of our blast furnaces are expected to operate for the majority of the period except for Hamilton Works, which is subject to a labor dispute,” USS said.

4Q Income from Operations

by Reportable Segment

•Flat-rolled reported a loss from operations of $156 million, compared to a loss of $174 million in the third quarter and a loss of $284 million in the year-ago period.

•U.S. Steel Europe (USSE) reported a loss from operations of $39 million, compared to a loss of $25 million in the third quarter and a loss of $3 million in the year-ago period.

•Tubular reported an income from operations of $96 million, compared to an income of $112 million in the third quarter and an income of $39 million in the year-ago period.

•Other businesses reported an income from operations of $7 million, compared to an income of $7 million in the third quarter and an income of $3 million in the year-ago period.

•Total segment losses from operations were $92 million, compared to $80 million in the third quarter and $245 million in the year-ago period.

•Total loss from operations was $114 million, compared to $138 million in the third quarter and $329 million in the year-ago period.

2010 Income from Operations

•Flat-rolled reported a total loss from operations of $312, compared to $1.438 billion in 2009.

•USSE reported a total loss from operations of $33 million, compared to $208 million in 2009.

•Tubular reported a total income from operations of $349 million, compared to $57 million in 2009.

•Other business reported a total income from operations of $52 million, compared to a loss of $2 million in 2009.

More Numbers

•The average realized price per net ton for flat-rolled was $657 in the fourth quarter ($688 in the third quarter, $633 in the year-ago period) and $675 for the year ($651 in 2009).

•USS and USSE shipped a total of 5.475 million net tons in the fourth quarter (5.557 million in the third quarter, 4.654 million in the year-ago period) and a total of 22.316 million net tons for the year (14.981 million in 2009).

•USS reported net sales of $4.3 billion in the fourth quarter ($4.497 million in the third quarter, $3.354 million in the year-ago period) and $17.374 billion in 2010 ($11.048 billion in 2009).

•Capital expenditures were $250 million in the fourth quarter ($184 million in the third quarter, $149 million in the year-ago period) and $676 million for the year ($472 million in 2009).

•At year’s end, USS had $578 million in cash and $2.1 billion in total liquidity, compared to $1.2 billion in cash and $2.5 billion in total liquidity at Dec. 31, 2009.

 

Posted 1/25/2011