Chesterton Tribune

 

 

US Steel Corporation posts $1.5 billion net loss in 2015

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By KEVIN NEVERS

U.S. Steel Corporation (USS) is reporting a net loss in 2015 of $1.5 billion ($10.32 per diluted share), compared to a net income in 2014 of $102 million (69 cents), compared also to a net loss in 2013 of $1.645 billion ($11.37).

Excluding non-cash charges of $426 million ($2.92 per diluted share) for “restructuring and other strategic actions,” of $766 million ($5.24) for a full valuation allowance related to the company’s domestic deferred tax assets, and of $18 million (2 cents) for impairment on an equity investment--excluding as well a charge of $36 million (25 cents) related to the retirement of the company’s 2.75-percent Senior Convertible Notes--the adjusted net loss in 2015 was $262 ($1.79 per diluted share).

The 2014 net income of $102 million included net charges of $574 million (69 cents per diluted share) mostly due to non-cash charges for strategic actions.

USS is also reporting a net loss in the fourth quarter of $999 million ($6.38 per diluted share), compared to a net loss in the third quarter of $173 million ($1.18) and a net income in the year-ago of $275 ($1.83).

“The $815 of Carnegie Way benefits we realized in 2015 show that we continue to make significant progress on our journey toward our goal of achieving economic profit across the business cycle,” USS President and CEO Mario Longhi said. “Our progress is real and it is substantial, but our fourth quarter and full-year results show that it is not yet enough to fully overcome some of the work market and business conditions we have seen.”

The Carnegie Way, introduced in 2013, is a strategic belt-tightening described as a “disciplined approach” to “earn the right to grow and drive and sustain profitable growth.

Outlook

“We are facing significant headwinds and uncertainty in many of the markets we serve but remain focused on continuing to improve our cost structure, developing differentiated solutions for our customers and creating more reliable and agile operating capabilities,” Longhi said.

“We have a strong and growing pipeline of Carnegie Way projects that will provide benefits in our operating segments and all other areas of our company,” he added. “The substantive changes and improvements we are making continue to increase our earnings power. We are working hard every day to serve our customers and are well positioned to respond to improving market conditions.”

“At current market conditions,” USS said, “we would expect lower results in each of our operating segments as compared to 2015. We would expect that the operating efficiencies related to our current facility configuration, lower raw materials, operating and overhead costs, and additional Carnegie Way benefits would only partially offset the unfavorable effects of lower average realized prices and volumes.”

Other projections, “based on current market conditions”: improved results for Other Businesses, chiefly from real estate; lower post-retirement benefits expenses; and approximately $500 million in cash benefits from working capital improvements in 2016, mostly related to better inventory management.

2015/4Q Segment Earnings Before Interest, Income Taxes

* Flat-rolled: a loss of $237 million in 2015 (earnings of $709 million in 2014); a loss of $88 million in 4Q (a loss of $18 million in 3Q, earnings of 247 million in year-ago). USS attributed full-year results for Flat-rolled to lower shipments and average realized prices “due primarily to the negative impact of imports” and “high supply-chain inventories,” partially offset by Carnegie Way efforts.

* U.S. Steel Europe (USSE): earnings of $81 million in 2015 ($133 million in 2014); earnings of $6 million in 4Q ($18 million in 3Q, $34 million in year-ago).

* Tubular: a loss of $179 million in 2015 (earnings of $261 in 2014); loss of $64 million in 4! (loss of $50 million in 3Q, earnings of $121 million in year-ago).

* Other businesses: earnings of $33 million in 2015 ($82 million in 2014); earnings of $9 million in 4Q ($10 million in 3Q, $18 million in year-ago).

* Total earnings before interest and income taxes: a loss of $1.055 billion in 2015 (earnings of $413 in 2014); a loss of $306 million in 4Q (a loss of $170 million in 3Q, earnings of $397 in year-ago).

More 2015 Numbers

* Average realize price per ton of flat-rolled: $695 ($772 in 2014).

* Total USS and USSE shipments: 15.5 million net tons (19.8 million in 2014).

* Flat-rolled steel capability at U.S. facilities: 60 percent (78 percent in 2014).

* Raw flat-rolled steel production at U.S. facilities: 11.3 million net tons (16.9 million in 2014).

* Flat-rolled capital expenditures: $280 million ($322 in 2014).

* Net sales: $11.57 billion ($17.5 billion in 2014).

* USS retired $379 million in debit.

* At the end of 2015 the company had $755 million in cash and $2.4 billion in liquidity, compared to $1.4 billion in cash and $3.1 billion in liquidity at the end of 2014.

 

 

Posted 1/27/2016

 
 
 
 

 

 

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