Chesterton Tribune

 

 

USS projects loss in the 3rd quarter

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U.S. Steel Corporation (USS) stock was trading down 14 percent this morning, after the company released a third-quarter guidance after deadline on Wednesday which projects an adjusted diluted loss per share of 35 cents.

USS was trading at $10.72 at 9 a.m. today--down from its $12.45 close on Wednesday--and is down some 60 percent from its 52-week high of $30.91.

“The positive flat-rolled steel market indicators experienced earlier this summer have softened after a brief recovery in steel selling prices,” USS said on Wednesday. “The impact of falling steel prices through the second quarter, combined with the impact of a larger than expected drop in scrap prices on market sentiment, is expected to negatively impact flat-rolled earnings in the second half of the year.”

“As a result, our current assessment of the flat-rolled segment suggests two blast furnaces will remain idled through at least the end of the year,” USS noted. “Based on the continued idling of our two U.S. blast furnaces and current demand forecasts, we now expect full-year flat-rolled shipments to third-party customers to be approximately 10.7 million tons. We will continue to evaluate our footprint to best match our production with our order book.”

USS also said that market conditions in Europe “have continued to deteriorate, as the dislocation between steel selling prices and raw material costs continues to result in significant margin compression.” USS does not expect this year to re-start a currently idled blast furnace in Europe, while it’s pursuing a “headcount reduction” at its European operations of 2,500 by the end of 2021. “To date, we have eliminated approximately 1,800 positions,” the company said.

Meanwhile, the tubular segment is projected “to remain under pressure for the remainder of the year as market conditions have turned negative and import levels remain high,” USS said. “Weaker demand for oil country tubular good product, which has reduced our full-year shipment expectation to approximately 0.7 million tons, and lower selling prices for seamless and welded pipe, are expected to have a significantly negative impact on earnings in the second half of the year.”

In August USS announced layoffs at its tin mill in East Chicago affecting about 150 employees and layoffs as well at its Great Lake Works affecting about 200 employees.

 

 

Posted 9/19/2019

 
 
 
 

 

 

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