U.S. Steel Corporation (USS) cut its losses in the first quarter of 2011.
Today the company reported a net loss of $86 million or 60 cents per diluted
share, compared to a net loss of $249 million or $1.74 in the fourth quarter
of 2010 and a net loss of $157 million or $1.10 in the year-ago period.
“We reported better first-quarter operating results in comparison to the
fourth quarter as improving economic conditions and firm customer demand led
to increased average realized prices, shipments, and raw steel capability
utilization for our North American and European flat-rolled operations,” USS
Chair and CEO John Surma said. “The improvements were partially offset by
increased raw materials costs.”
USS did say that retiree benefit expenses rose in the first quarter to $71
million—compared to $43 million in the fourth quarter and $44 million in the
year-ago period—“as a result of a decline in the market-related value of
pension plan assets and higher amortization of unrecognized losses, both of
which relate to pension plan asset losses experienced in 2008.”
“We expect to report a significant operating profit, primarily due to the
realization of price increases in our flat-rolled segment,” Surma said.
“Order rates for most customer groups, which began to improve later in the
fourth quarter, remained firm throughout the first quarter. While recent
order rates have moderated, we remain cautiously optimistic that improving
global economic conditions will continue, further stimulating end-user
“We are assessing the effect of the events in Japan on our business,” Surma
added. “Some of our automotive customers have reduced April builds and
adjusted future production schedules due to parts shortages. We expect
reductions in automotive production during the quarter to be made up in 2011
as vehicle inventories, presently low compared to historical levels, will
need to be replenished.”
Flat-rolled results in particular were expected “to improve significantly”
due “largely by significantly higher average realized prices,” USS said.
“Raw materials costs are expected to remain relatively stable, reflecting
our iron ore, coal, and coke position. Average realized prices are expected
to increase from first-quarter 2011 as we realize benefits from increases in
spot and contract prices, with index-based contract prices reflecting
significantly higher published market price assessments. Raw steel
capability utilization is expected to increase from the first quarter of
2011 as all of our steelmaking facilities are expected to operate for the
majority of the period except for Hamilton Works.”
1Q Income from
•Flat-rolled reported a loss from operations of $57 million, compared to a
loss of $156 million in the fourth quarter and a loss of $80 million in the
•U.S. Steel Europe (USSE) reported a loss from operations of $5 million,
compared to a loss of $39 million in the fourth quarter and an income from
operations of $12 million in the year-ago period.
•Tubular reported an income from operations of $30 million, compared to an
income of $96 million in the fourth quarter and an income of $45 million in
the year-ago period.
•Other businesses reported an income from operations of $12 million,
compared to an income of $7 million in the fourth quarter and an income of
$10 million in the year-ago period.
More Numbers 1Q
realized price per net ton for flat-rolled was $720, compared to $657 in the
fourth quarter and $654 in the year-ago period.
steel production was 4.598 million net tons, compared to 4.387 million in
the fourth quarter and 4.383 million in the year-ago period.
raw-steel capability utilization was 77 percent, compared to 72 percent in
the fourth quarter and 73 percent in the year-ago period.
•USS and USSE
shipped a total of 5.824 million tons, compared to 5.475 million in the
fourth quarter and 5.404 million in the year-ago period.
net sales of $4.864 billion, compared to $4.3 billion in the fourth quarter
and $3.896 billion in the year-ago period.
capital expenditures were $125 million, compared to $194 million in the
fourth quarter and $80 million in the year-ago period.
•On March 31,
USS had $421 million in cash and $2.0 billion of total liquidity, compared
to $578 million in cash and $2.1 billion of total liquidity on Dec. 31,