US Steel sees earnings decline year over year in Q3

United States Steel Corp., headquartered in Pittsburgh, has reported third quarter 2024 net earnings of $119 million, or 48 cents per diluted share, and adjusted net earnings of $140 million, or 56 cents per diluted share, a decline from net earnings of $299 million, or $1.20 per diluted share and adjusted net earnings of $350 million, or $1.40 per diluted share, in the third quarter of 2023.

The company’s earnings before interest, taxes, depreciation and amortization, or EBITDA, for the recently completed quarter were $319 million compared with $578 million in the third quarter of 2023.

Despite this year-over-year decline resulting from weaker average selling prices across all the company’s operating segments, U.S. Steel President and CEO David B. Burritt says the results “demonstrated resilience in our business model.”

“The North American Flat-Rolled segment continued to benefit from a strong commercial strategy that leveraged a diverse product mix and a purposeful increase in contracted volumes across the end markets we serve," he continues. "Our Mini Mill segment, which was impacted by softening market pricing, delivered 11 percent EBITDA margins when adjusting for $40 million in one-time startup costs for strategic projects. USSE [U.S. Steel Europe] earnings benefited from a one-time favorable adjustment related to CO₂ allocations, which offset pressures from a challenging demand environment in Europe. Tubular earnings were weaker in the third quarter, as expected, reflecting lower benchmark prices.”

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In terms of U.S. Steel’s strategic initiatives, Burritt says first coil was achieved at Big River 2 (BR2), the company’s flat-rolled steelmaking facility near Osceola, Arkansas, that recycles, refines and processes steel scrap into finished steel products, with shipments to customers expected to begin during the fourth quarter.

“Congratulations to the Big River team on safely delivering over $4 billion of growth capital investments, including the nongrain-oriented (NGO) electrical steel line and the dual Galvalume/Galvanized coating line,” he says. “Coupled with our enhanced commercial strategy and recent investments made in the North American Flat Rolled segment, we look forward to building upon our more resilient earnings with increasing free cash flow.”

Regarding U.S. Steel’s transaction with Nippon Steel Corp., Burritt says, “We continue to work towards closing by year-end. Importantly, in September, the Board of Arbitration ruled in favor of U. S. Steel under our basic labor agreement. We are also pleased to see additional commitments from Nippon Steel, which will build upon the existing benefits including the transfer of technologies and further innovations from Nippon Steel's $500 million annual R&D spending to further strengthen the merits of the transaction. We look forward to delivering these benefits to all of our stakeholders, especially to our hardworking men and women in the Mon Valley and Gary plants, where Nippon Steel has committed to invest at least $1.3 billion, increasing the total capital commitment to at least $2.7 billion."

U.S. Steel expects fourth quarter adjusted EBITDA to be between $225 million and $275 million. The company says its North American Flat-Rolled segment results should decrease slightly, driven largely by lower lagging average selling price expectations for the quarter, though it expects an improvement in Mini Mill segment results, even after accounting for $25 million of related startup and one-time construction costs at BR2, reflecting an expected improvement in average selling prices.

In Europe, results are expected to be lower given the absence of the positive CO₂ allocations and weak underlying demand and pricing conditions. U.S. Steel says its Tubular segment results should be largely consistent with those seen in the third quarter.

U.S. Steel’s third-quarter 2024 earnings presentation can be accessed here, while its segment and financial operational data are available here.