Chesterton Tribune



USS posts earnings of $261 million in 2nd quarter

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U.S. Steel Corporation (USS) is reporting a net income in the second quarter of 2017 of $261 million or $1.48 per diluted share, compared to a net loss in the first quarter of $180 million or $1.03 and a net loss in the year-ago period of $46 million or 32 cents.

The second-quarter results included a one-time gain of $72 million or 41 cents per diluted share in connection with the sale of U.S. Steel Canada.

“Our facilities performed better in the second quarter, particular in our flat-rolled segment,” USS President and CEO Dave Burritt said in a statement released today. “Better operations combined with higher prices and volumes in all of our segments and improved results from our mining operations, resulted in a $300-million improvement in our segment results compared with the first quarter.”

“Our European operations continue to deliver solid earnings and our tubular operations continue to make progress towards returning profitability,” Burritt added. “We are focused on our strategic priorities: driving operational excellence across our business--from our plants to our support teams; investing in our facilities through our asset revitalization program; and providing our employees with the resources they need to implement positive, substantive changes. Successful execution of this strategy will result in continuous improvements in safety, quality, delivery, and costs and create meaningful value and returns for all of our stakeholders, including employees, customers, and stockholders.”


“We are seeing a more bullish sentiment in the markets served by our flat-rolled and European segments right now, as prices have been increasing and overall demand has been stable,” Burritt said. “Our tubular segment continues to benefit from operational and cost improvements we have made, as well as from stronger market conditions. Our investment in facilities and our people continues to increase. These strategic investments, combined with our focus on achieving operational excellence, will deliver continuous improvements in safety, quality, delivery, and costs that will position us to succeed through business cycles, and support future growth initiatives.”

If market conditions remain at their current levels, USS is projecting net earnings in 2017 of $300 million or $1.70 per share; and EBITDA (adjusted earnings before interest, income taxes, depreciation, and amortization) of $1.1 billion, including flat-rolled EBITDA of $750 million.

USS is also projecting the Other Businesses segment to be comparable to 2016 and post-retirement expenses of $60 million.

“We believe market conditions, which include spot prices, raw material costs, customer demand, import volumes, supply chain inventories, rig counts, and energy prices will change, and as changes occur during the balance of 2017 we expect these changes to be reflected in our net earnings and adjusted EBITDA.”

2Q Segment Earnings Before Interest, Income Taxes

* Flat-rolled: $218 million (loss of $90 million in 1Q, earnings of $6 million in the year-ago). USS attributed the improvement to “higher results from our mining operations and a second consecutive quarter of increasing average realized prices and shipments.”

* U.S. Steel Europe (USSE): $55 million ($87 million in 1Q, $55 million in the year-ago).

* Tubular: loss of $29 million (loss of $57 million in 1Q, loss of $78 million in the year-ago).

* Other businesses: $9 million ($13 million in 1Q, $10 million in the year-ago).

More 2Q Numbers

* Average realized price per net ton of flat-rolled: $742 ($719 in 1Q, $642 in the year-ago).

* Total USS and USSE shipments: 3.83 million net tons (3.65 million in 1Q, 3.88 million in the year-ago).

* Flat-rolled steel capability at U.S. facilities: 64 percent (65 percent in 1Q, 65 percent in the year-ago).

* Raw flat-rolled steel production at U.S. facilities: 2.71 million net tons (2.71 million in 1Q, 2.73 million in the year-ago).

* Flat-rolled capital expenditures: $47 million ($25 million in 1Q, $28 million in the year-ago).

* Net sales: $3.14 billion ($2.72 billion in 1Q, $2.58 billion in the year-ago).



Posted 7/26/2017




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