Chesterton Tribune

USS posts $68 million net loss in 2011, improvement on 2010

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By KEVIN NEVERS

U.S. Steel Corporation (USS) is reporting a net loss last year of $68 million or 47 cents per diluted share.

That result compares favorably to the 2010 net loss of $482 million or $3.36 and even more so to the 2009 net loss of $1.401 billion or $10.42.

In the fourth quarter of 2011, USS posted a net loss of $226 million or $1.57 per diluted share, compared to a net income in the third quarter of $22 million or 15 cents and a net loss in the year-ago period of $249 million or $1.74.

Excluding a $51 million net foreign currency loss and an $11 million after-tax environmental remediation charge, the adjusted fourth-quarter net loss was $164 million or $1.14 per diluted share.

“Our operating results for the fourth quarter included another solid performance by our tubular segment, reflecting the continued strength of oil-directed drilling,” USS Chair and CEO John Surma said in a statement released today. “Our flat-rolled segment incurred a loss from operations due to soft steel-market conditions during most of the quarter, increased costs related to planned maintenance outages, and accounting losses on transactions to sell excess iron ore pellets. U.S. Steel Europe results continue to reflect the difficult economic situation in the region.”

1Q General Outlook

“We expect to report a significant improvement in our operating results in the first quarter as compared to the fourth quarter, mainly driven by improved average realized prices and shipments for our flat-rolled segment,” Surma said. “Our tubular operations are expected to have another strong performance as operating results are expected to be in line with the fourth quarter. We expect our European segment results to reflect the effects of the continued difficult economic environment across Europe.”

1Q Flat-rolled

Outlook

USS is anticipating “good results” for the flat-rolled segment in the first quarter “as a result of increased average realized prices and shipments, as improving end user demand and lower customer inventories began to significantly improve market conditions late in the fourth quarter,” the company said. “

The “expected increase in first-quarter prices reflects higher average realized prices on both spot and contract business, reflecting increases in our newly negotiated cost-based and firm-priced contracts,” USS added. “Additionally, operating costs are expected to improve in the first quarter, reflecting reduced energy costs and facility maintenance and outage costs partially offset by higher raw materials costs.”

2010 Income from Operations

•Flat-rolled reported a full-year income from operations of $452 million, compared to a loss of $261 million in 2010.

•U.S. Steel Europe (USSE) reported a full-year loss from operations of $162 million, compared to a loss of $33 million in 2010.

•Tubular reported a full-year income from operations of $316 million, compared to an income of $353 million in 2010.

•Other businesses reported a full-year income from operations of $46 million, compared to an income of $55 million 2010.

•USS reported a total full-year income of operations—from all reportable segments and other businesses—of $652 million, compared to an income of $114 million in 2010.

4Q Income from Operations

•Flat-rolled reported a loss from operations of $89 million, compared to an income of $203 million in the third quarter and a loss of $143 million in the year-ago period. “The decrease was driven largely by lower average realized prices and shipments created by the uncertain economic outlook and increased domestic supply, which perpetuated cautious purchasing patterns early in the quarter,” the company said.

•USSE reported a loss from operations of $89 million, compared to a loss of $50 million in the third quarter and a loss of $39 million in the year-ago period.

•Tubular reported an income of $119 million, compared to an income of $134 million in the third quarter and an income of $97 million in the year-ago period.

•Other businesses reported an income of $16 million, compared to an income of $8 million in the third quarter and an income of $8 million in the year-ago period.

•USS reported a total fourth-quarter loss from operations of $43 million, compared to an income of $295 million in the third quarter and a loss of $77 million in the year-ago period.

More Numbers

•The average realized price per net ton of flat-rolled was $741 in the fourth quarter ($773 in the third quarter, $657 in the year-ago period) and $759 for the full year ($675 in 2010).

•USS and USSE shipped a total of 5.419 million tons in the fourth quarter (5.512 million in the third quarter, 5.475 million in the year-ago period) and 22.253 million tons for the full year (22.316 million in 2010).

•Flat-rolled raw-steel capability utilization was 75 percent in the fourth quarter (74 percent in the third quarter, 72 percent in the year-ago period) and 77 percent for the full year (76 percent in 2010).

•USS reported net sales of $4.819 billion in the fourth quarter ($5.081 billion in the third quarter, $4.3 billion in the year-ago period) and $19.884 billion for the full year ($17.374 billion in 2010).

•Flat-rolled capital expenditures were $189 million in the fourth quarter ($160 million in the third quarter, $194 million in the year-ago period) and $616 million for the full year ($499 million in 2010).

•On Dec. 31, 2011, USS had $408 million in cash and $1.8 billion in total liquidity, compared to $578 million in cash and $2.1 billion in total liquidity on Dec. 31, 2010.

 

Posted 1/31/2012