Today, United States Steel Corporation (NYSE: X) provided second
quarter 2019 guidance.
We expect second quarter 2019 adjusted EBITDA to be
approximately $250 million, which excludes approximately $15
million of estimated second quarter impacts from the December 24,
2018 fire at our Clairton coke making facility. We expect
second quarter 2019 adjusted diluted earnings per share to be
approximately $0.40.
Second Quarter 2019 Adjusted EBITDA
Commentary
Flat-Rolled segment adjusted EBITDA, which we expect to be
higher versus the first quarter, is being negatively impacted by
decreasing steel prices and softening end market demand.
Additionally, second quarter shipments are lower than we expected
due to flooding in the southern United States, which has limited
the availability of barges and our ability to ship finished product
to customers over the past few weeks.
For both our USSE and Tubular segments, we expect second quarter
2019 adjusted EBITDA to be lower than first quarter 2019. In
Europe, market headwinds have increased while Tubular margins are
under pressure due to lower selling prices.
Temporary Adjustments to Global Blast Furnace
Footprint
In response to current market conditions, we are taking actions
aligned with our strategy by adjusting our global blast furnace
footprint. We are idling two blast furnaces in the United
States and one blast furnace in Europe to better align our global
production with our order book.
In the United States, we began a planned maintenance outage on
the Great Lakes B2 blast furnace last week. Based on current
market conditions, we expect the B2 blast furnace to remain idled
after the completion of the planned outage. In
addition, we expect to temporarily idle a south blast furnace at
our Gary Works facility. As a result of these footprint
actions, we expect to decrease monthly blast furnace production
capacity by approximately 200,000 – 225,000 tons beginning in
July. If both furnaces remain idled for the remainder of the
year, we expect full year Flat-Rolled shipments to third party
customers to be approximately 11.0 million tons. We will
resume blast furnace production at one or both idled blast furnaces
when market conditions improve.
In Europe, USSE continues to be negatively impacted by
increasing levels of imports and continued market headwinds related
to raw material costs and demand. As a result, we will idle
the #2 blast furnace, which has the capacity to produce
approximately 125,000 tons per month. If #2 blast furnace
remains idled for the remainder of the year, we expect full year
USSE shipments to third party customers to be approximately 3.6
million tons. We will resume #2 blast furnace production when
market conditions improve.
While market conditions have softened, we remain focused on
executing the value creation strategy that is underway. We
believe that the investments being made to improve costs and expand
product capabilities will create a more differentiated and agile
company, combining our competitive advantages with state-of-the-art
sustainable steel technology to create long-term value for our
stockholders, customers and employees.
Forward Looking Statements
This release contains information that may constitute
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. We intend the
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements in those sections.
Generally, we have identified such forward-looking statements by
using the words “believe,” “expect,” “intend,” “estimate,”
“anticipate,” “project,” “target,” “forecast,” “aim,” “should,”
“will” and similar expressions or by using future dates in
connection with any discussion of, among other things, operating
performance, trends, events or developments that we expect or
anticipate will occur in the future, statements relating to volume
impacts, share of sales and earnings per share changes, and
statements expressing general views about future operating
results. However, the absence of these words or similar
expressions does not mean that a statement is not
forward-looking. Forward-looking statements are not
historical facts, but instead represent only the Company’s beliefs
regarding future events, many of which, by their nature, are
inherently uncertain and outside of the Company’s control. It
is possible that the Company’s actual results and financial
condition may differ, possibly materially, from the anticipated
results and financial condition indicated in these forward-looking
statements. Management believes that these forward-looking
statements are reasonable as of the time made. However,
caution should be taken not to place undue reliance on any such
forward-looking statements because such statements speak only as of
the date when made. Our Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except
as required by law. In addition, forward-looking statements
are subject to certain risks and uncertainties that could cause
actual results to differ materially from our Company's historical
experience and our present expectations or projections. These
risks and uncertainties include, but are not limited to the risks
and uncertainties described in “Item 1A. Risk Factors” in our
Annual Report on Form 10-K for the year ended
December 31, 2018 and those described from time to time in our
future reports filed with the Securities and Exchange
Commission. References to "we," "us," "our," the "Company,"
and "U. S. Steel," refer to United States Steel Corporation and its
consolidated subsidiaries.
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF
ADJUSTED EBITDA GUIDANCE
(Dollars in millions) |
Reconciliation to Projected Adjusted EBITDA Included in
Guidance
|
|
2Q 2019 |
|
Projected net earnings attributable to United States Steel
Corporation included in guidance |
$ |
57 |
|
Estimated income tax benefit |
|
(22 |
) |
Estimated net interest and other financial costs |
|
50 |
|
Estimated depreciation, depletion and amortization |
|
150 |
|
Projected EBITDA included in guidance |
$ |
235 |
|
Estimated second quarter impact of the December 24, 2018 fire at
the Clairton coke making facility |
|
15 |
|
Projected adjusted EBITDA included in guidance |
$ |
250 |
|
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF
ADJUSTED NET EARNINGS GUIDANCE
(Dollars in millions, except per share amounts) |
Reconciliation to Adjusted Net Earnings Attributable to U.
S. Steel Included in Guidance
|
|
2Q 2019 |
|
Net earnings attributable to United States Steel Corporation
included in guidance |
$ |
57 |
|
Estimated second quarter impact of the December 24, 2018 fire at
the Clairton coke making facility1 |
|
12 |
|
Adjusted net earnings attributable to United States Steel
Corporation included in guidance |
$ |
69 |
|
Reconciliation to Adjusted Diluted Net Earnings Per
Share Included in Guidance |
|
2Q 2019 |
|
Diluted net earnings per share included in guidance |
$ |
0.33 |
|
Estimated second quarter impact of the December 24, 2018 fire at
the Clairton coke making facility1 |
|
0.07 |
|
Adjusted diluted net earnings per share included in guidance |
$ |
0.40 |
|
1 This adjustment has been tax effected.
Note Regarding Non-GAAP Financial Measures
We present adjusted net earnings (loss), adjusted net earnings
(loss) per diluted share, earnings (loss) before interest, income
taxes, depreciation and amortization (EBITDA) and adjusted EBITDA,
which are non-GAAP measures, as additional measurements to enhance
the understanding of our operating performance. We believe
that EBITDA, considered along with net earnings (loss), is a
relevant indicator of trends relating to our operating performance
and provides management and investors with additional information
for comparison of our operating results to the operating results of
other companies.
Adjusted net earnings (loss), adjusted net earnings (loss) per
diluted share and adjusted EBITDA are non-GAAP measures that
exclude the financial effects of the Clairton coke making facility
fire that are not part of the Company's core operations. We present
adjusted net earnings (loss), adjusted net earnings (loss) per
diluted share and adjusted EBITDA to enhance the understanding of
our ongoing operating performance and established trends affecting
our core operations, by excluding the financial effects of the
Clairton coke making facility fire that can obscure underlying
trends. U. S. Steel's management considers adjusted net earnings
(loss), adjusted net earnings (loss) per diluted share and adjusted
EBITDA as alternative measures of operating performance and not
alternative measures of the Company's liquidity. U. S. Steel’s
management considers adjusted net earnings (loss), adjusted net
earnings (loss) per diluted share and adjusted EBITDA useful to
investors by facilitating a comparison of our operating performance
to the operating performance of our competitors. Additionally, the
presentation of adjusted net earnings (loss), adjusted net earnings
(loss) per diluted share and adjusted EBITDA provides insight into
management’s view and assessment of the Company’s ongoing operating
performance, because management does not consider the adjusting
items when evaluating the Company’s financial performance. Adjusted
net earnings (loss), adjusted net earnings (loss) per diluted share
and adjusted EBITDA should not be considered a substitute for net
earnings (loss), earnings (loss) per diluted share or other
financial measures as computed in accordance with U.S. GAAP and is
not necessarily comparable to similarly titled measures used by
other companies.
United States Steel Corporation, headquartered in Pittsburgh,
Pa., is a leading integrated steel producer and Fortune 250 company
with major operations in the United States and Central
Europe. For more information about U. S. Steel, please visit
www.ussteel.com.
CONTACTS:
Meghan Cox ManagerCorporate CommunicationsT – (412) 433-6777E –
mmcox@uss.com
Kevin Lewis General ManagerInvestor RelationsT – (412) 433-6935E
– klewis@uss.com
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