U.S. Steel Corporation (USS) is reporting a a net loss in the first quarter
of 2013 of $73 million or 51 cents per diluted share, compared to a net loss
in the fourth quarter of $50 million or 35 cents and a net loss in the
year-ago period of $219 million or $1.52.
“Total reportable segment and Other Businesses operating results improved
compared to the fourth quarter of 2012 despite the difficult global economic
environment and very competitive steel market conditions,” USS Chair and CEO
John Surma said in a statement released on Tuesday.
The adjusted first-quarter net loss was $51 million or 35 cents per diluted
share, after excluding an after-tax charge of $22 million or 16 cents,
related to re-purchases of $542 million principal amount of the company’s 4
percent Senior Convertible Notes due 2014, reducing the outstanding
principal amount on those notes to $321 million.
The adjusted fourth-quarter net loss was $59 million or 41 cents per diluted
share. Adjusted year-ago net loss was $110 million or 67 cents.
“While we project North American flat-rolled market conditions for the
second quarter to be comparable to the first quarter,” USS said, “we expect
an operating loss for our flat-rolled segment primarily due to higher
operating costs. Operating costs are projected to increase due primarily to
higher repairs and maintenance costs as well as higher natural gas costs,
offset by lower raw materials costs. Repairs and maintenance costs are
projected to be $75 million higher in the second quarter due to maintenance
projects already largely completed at Gary Works and Lake Erie Works.”
“Average realized prices, including the effect of a more favorable product
mix, are expected to be comparable to the first quarter while shipments are
projected to decrease slightly,” the company added.
“The labor agreement covering our Lake Erie Works expired on April 15 and a
successor agreement has not been reached,” USS said. “U.S. Steel Canada
implemented a lockout of represented employees effective April 28.”
1Q Income from Operations
* Flat-rolled reported a loss from operations of $13 million, compared to an
income in the fourth quarter of $11 million and an income in the year-ago of
$183 million. USS attributed the first-quarter results primarily to
increased operating costs. “Lead times throughout the first quarter of 2013
remained short and afforded buyers the opportunity to limit their order-book
exposure, prevent upward movement in spot-market prices,” the company said.
* U.S. Steel Europe (USSE) reported an income from operations of $38
million, compared to an income in the fourth quarter of $7 million and a
loss from operations in the year-ago of $34 million.
* Tubular reported an income from operations of $64 million, compared to an
income in the fourth quarter of $32 million and an income in the year-ago of
* Other businesses reported an income from operations of $5 million,
compared to an income in the fourth quarter of $9 million and an income in
the year-ago of $17 million.
More 1Q Numbers
* The average realized price per net ton of flat-rolled was $719, compared
to $721 in the fourth quarter and $764 in the year-ago.
* USS and USSE shipped 5.494 million net tons, compared to 5.236 million in
the fourth quarter and 5.666 million in the year-ago.
* Flat-rolled steel capability was 82 percent, compared to 77 percent in the
fourth quarter and 83 percent in the year-ago.
* USS reported net sales of $4.595 billion, compared to $4.487 billion in
the fourth quarter and $5.172 billion in the year-ago.
* Flat-rolled capital expenditures were $96 billion, compared $141 billion
in the fourth quarter and $181 billion in the year-ago.
* As of March 31, USS had $733 million in cash and $2.5 billion of total
liquidity, compared to $570 million in cash and $2.4 billion of total
liquidity on Dec. 31, 2012.