US Steel shows improvement in Q3 of 2017

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Pittsburgh-based United States Steel Corp. has reported third quarter 2017 net earnings of $147 million, or 83 cents per diluted share. Adjusted net earnings were $161 million, or 92 cents per diluted share, which excluded a gain of $21 million, or 11 cents per diluted share, related to equity affiliate transactions, primarily because of the sale of its ownership interest in Tilden Mining Co. LC, and a debt extinguishment loss and other related costs of $35 million, 20 cents per diluted share. Third quarter 2016 net earnings were $51 million, or 32 per diluted share.

President and Chief Executive Officer Dave Burritt says, “Our third quarter results were modestly better than we expected, with stable operating performance at each of our segments, and our tubular segment producing positive EBITDA (earnings before interest, taxes, depreciation and amortization) in the quarter. Our results for the first nine months of 2017 improved over the first nine months of 2016, with all three of our segments improving compared with 2016.”

U.S. Steel’s operating segments are flat-rolled, U.S. Steel Europe and tubular.

The company’s net debt decreased by $200 million in the third quarter to $1.2 billion, while its total liquidity also increased during the quarter. The company says it is well-positioned to continue the implementation of its asset revitalization program.

In addition to the increased focus on its operations, U.S. Steel says it also continues to develop the next generation of steel products. “Our Generation 3 steels will provide superior formability and high-strength properties while using a low-alloyed approach for robust weldability,” the company says in a news release announcing its financial results. “To expand our capabilities in Generation 3 steels, we announced last month that a new continuous galvanizing line will be constructed at our PRO-TEC Coating Co. joint venture, which will allow PRO-TEC to produce these Generation 3 steels with a hot-dipped zinc coating.”

The company says this line will be the first of its kind, using proprietary technology capable of producing “high-quality, cutting-edge advanced high-strength steels that will meet our automotive customers’ needs and solve some of their most pressing challenges.”

Regarding U.S. Steel’s outlook for 2017, Burritt says, "We remain focused on our operations, revitalizing our assets and developing our talent. We are seeing operating improvements in the assets in which we are investing. This increases our confidence that we will achieve the 2020 improvement targets we have disclosed. We believe the attention to our assets and employees, with continued focus on improving safety, quality, delivery and cost, will result in improved operating reliability and enable us to remain a strong business partner for our customers."

If market conditions remain at their current levels, U.S. Steel says it expects 2017 net earnings of approximately $323 million, or $1.83 per share; 2017 adjusted net earnings of approximately $300 million, or $1.70 per share; and consolidated adjusted EBITDA of approximately $1.08 billion.