U.S. Steel Corporation (USS) is reporting a net income in the third quarter
of $44 million or 28 cents per diluted share, compared to $101 million or 62
cents in the second quarter and $22 million or 15 cents in the year-ago
“Third-quarter operating results were positive for all three reportable
segments in an economic environment that was more challenging than the
second quarter,” USS Chair and CEO John Surma said in a statement released
today. “Our tubular segment once again had solid results despite declining
rig activity and pricing pressure caused by rising oil country tubular goods
inventory and continued high levels of imports. Our flat-rolled and European
segments were profitable but continued to be challenged by difficult global
economic conditions. In addition, our flat-rolled segment continued to be
adversely affected by increased import levels.”
Net income for the third quarter included an after-tax charge of $22 million
or 13 cents per diluted share for employee lump-sum payments as provided by
the new labor agreement, USS said. Net income for the second quarter
included an after-tax charge of $11 million for an early redemption premium
on the company’s $300 million 5.65 percent senior notes due in 2013. Net
income for the year-ago period include $96 million of net foreign currency
“Our results are expected to reflect continued weakness in the European and
emerging market economies, as well as economic uncertainty in North
America,” Surma said. “We expect total reportable segment and other
businesses operating results to be around break-even for the fourth quarter
with decreased results in all reportable segments.”
“We expect a loss for our flat-rolled segment due to slightly lower average
realized prices, as well as lower shipments and higher operating costs,” USS
said. “Average realized prices and shipments are expected to be lower
compared to the third quarter as a result of cautious purchasing patterns
early in the quarter created by the uncertain global economic outlook.”
“However, market conditions have recently been improving in North America,
and we believe that we are already beyond the spot-price trough of the
fourth quarter,” the company added. “New spot orders are being transacted at
higher prices for delivery later this quarter. Operating costs are expected
to increase due to scheduled blast furnace and other maintenance projects.”
3Q Income from
•Flat-rolled reported an income from operations of 29 million, compared to
$177 million in the second quarter and $203 million in the year-ago. Results
declined “primarily due to a $31 per ton decrease in average realized
prices, as significant price decreases for scrap and globally traded
steelmaking materials placed downward pressure on spot and index-based
pricing mechanisms in North American in the third quarter,” USS said. “The
spot market continues to pressured by high import volumes, which for sheet
products have increased 13 percent year over year through the first nine
months of 2012. Proceeds from steel substrate sales to our tubular segment
have also decreased. Shipments and operating costs for our flat-rolled
segment were comparable to the second quarter.”
•U.S. Steel Europe (USSE) reported an income from operations of $27 million,
compared to $34 million in the second quarter and a loss from operation of
$50 million in the year-ago.
•Tubular reported an income from operations of $102 million, compared to
$103 million in the second quarter and $134 in the year-ago.
•Other businesses reported an income from operations of $13 million,
compared to $16 million in the second quarter and $8 million in the
•Total income from operations was $62 million, compared to $253 million in
the second quarter and $199 million in the year-ago.
More 3Q Numbers
•The average realized price per net ton of flat-rolled was $741, compared to
$772 in the second quarter and $773 in the year-ago.
•USS and USSE shipped a total of 5.34 million ton, compared to 5.434 in the
second quarter and 5.512 in the year-ago.
•Flat-rolled raw-steel capability was 77 percent, compared to 77 percent in
the second quarter and 74 percent in the year-ago.
•USS reported net sales of $4.652 billion, compared to $5.017 billion in the
second quarter and $5.081 billion in the year-ago.
•Flat-rolled capital expenditures were $89 million, compared to $151 million
in the second quarter and $160 million in the year-ago.
•On Sept. 30, USS had $536 million in cash and $2.4 billion of total
liquidity, compared to $565 million in cash and $2.4 billion of total
liquidity on June 30.