United States Steel Corporation (NYSE: X) today provided first
quarter 2020 guidance. First quarter 2020 adjusted EBITDA is
expected to be approximately $30 million. The Company expects first
quarter 2020 adjusted diluted loss per share to be approximately
($0.80).
“Through the quarter, our Flat-rolled operations have performed
well, and we are recognizing the operational and financial benefits
of the investments in our assets that we have made over the past
several years. Strong performance on reliability, quality, and
productivity, combined with a continued focus on driving
sustainable cost improvements across the footprint, have
contributed to a better than expected first quarter to date,”
commented President and Chief Executive Officer David B. Burritt.
“The Tubular market continues to be challenging and conditions in
Europe remain volatile. We are focused on preserving cash and
liquidity in the current market environment.”
Burritt continued, “At U. S. Steel, safety is our top priority
and we are continuing to set records related to safety performance,
another indication that our facilities are running efficiently and
reliably. We continue to monitor the impacts of the Coronavirus and
are following policies and procedures recommended by health and
government officials to ensure our employees are working in a safe
and healthy environment. We understand the situation remains fluid
and we are preparing our operations to be flexible as circumstances
may warrant. Our regional supply chain minimizes the risk of
significant supply-chain related production disruptions and we
continue to work with our customers to provide value-added steel
solutions as we execute our world-competitive, ‘best of both’
strategy.”
Adjusted EBITDA Commentary
Our Flat-rolled segment results are expected to be better than
anticipated as strong operating performance across our footprint,
continued cost improvement, and seasonally strong shipment volumes
more than offset the typical seasonality of mining. Additionally,
the domestic flat-rolled steel market has remained healthy
throughout the first quarter to date. Extended lead times are
supported by robust construction end-market demand and an end to
destocking that negatively impacted order rates throughout 2019. In
April, we will commence the safe and structured indefinite idling
of our iron and steelmaking operations at Great Lakes Works outside
of Detroit, Mich. This decision was previously announced in
December 2019 as part of our world-competitive, “best of both”
strategy. We continue to expect to indefinitely idle the Great
Lakes Works hot strip mill before the end of 2020. Separately, we
currently expect to begin a scheduled 48-day outage at our Gary
Works blast furnace #4 in April.
In Europe, steel selling prices have steadily increased
throughout the quarter resulting in better than anticipated first
quarter performance for our USSE segment to date. Still, the flow
through of lower prices on our monthly and quarterly contracts and
elevated raw material costs are limiting near-term financial
performance.
Our Tubular segment remains challenged as oil prices remain
under significant pressure and rig counts continue to be low. We
are continuing to monitor the recent change in market conditions
with respect to our Tubular business and will evaluate the impact
on the carrying value of the net assets of this business.
Coronavirus Impact
The global Coronavirus outbreak is an unprecedented and rapidly
evolving situation. It remains uncertain how long the situation
will last and what the impacts will be for the full year. Given the
significant uncertainty in the marketplace, we continue to monitor
demand levels and plan to provide more information during our first
quarter earnings call.
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, anticipated
cost savings, potential capital and operational cash improvements,
U. S. Steel’s future ability or plans to take ownership of the Big
River Steel joint venture as a wholly owned subsidiary, 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. The 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 the Company's historical
experience and present expectations or projections. These risks and
uncertainties include but are not limited to possible production or
operations interruptions related to the Coronavirus that could
disrupt supply or delivery of, or demand for, the Company’s
products, as well as the risks and uncertainties described in “Item
1A. Risk Factors” in our Annual Report on Form 10-K for the
year ended December 31, 2019, and those described from time to
time in the Company’s 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
CORPORATIONNON-GAAP FINANCIAL MEASURESRECONCILIATION OF
ADJUSTED EBITDA GUIDANCE
|
(Dollars in millions) |
Reconciliation to Projected Adjusted EBITDA Included in
Guidance |
|
1Q 2020 |
|
Projected net loss attributable to United States Steel Corporation
included in guidance |
$ |
(142 |
) |
Estimated income tax benefit |
|
(33 |
) |
Estimated net interest and other financial costs |
|
43 |
|
Estimated depreciation, depletion and amortization |
|
156 |
|
Projected EBITDA included in guidance |
$ |
24 |
|
Estimated first quarter adjustments |
|
6 |
|
Projected adjusted EBITDA included in guidance |
$ |
30 |
|
UNITED STATES STEEL
CORPORATIONNON-GAAP FINANCIAL MEASURESRECONCILIATION OF
ADJUSTED NET LOSS GUIDANCE
|
|
(Dollars in millions, except per share amounts) |
|
Reconciliation to Projected Adjusted Net Loss Attributable
to U. S. Steel Included in Guidance |
|
1Q 2020 |
|
Projected net loss attributable to United States Steel Corporation
included in guidance |
$ |
(142 |
) |
Estimated first quarter adjustments 1 |
|
6 |
|
Projected adjusted net loss attributable to United States Steel
Corporation included in guidance |
$ |
(136 |
) |
|
|
|
|
Reconciliation to
Projected Adjusted Diluted Net Loss Per Share Included in
Guidance |
|
1Q 2020 |
|
Projected diluted net loss per share included in guidance |
$ |
(0.84 |
) |
Estimated first quarter adjustments 1 |
|
0.04 |
|
Projected adjusted diluted net loss per share included in
guidance |
$ |
(0.80 |
) |
1 These adjustments have not been tax effected due to the full
valuation allowance on our domestic deferred tax assets established
in the fourth quarter of 2019.
Note: Excludes the impact of the Company’s quarterly mark to
market adjustment related to the Big River Steel put and call
options and the impact of the acquisition of the remaining 50%
ownership interest in USS-POSCO Industries (UPI) that closed on
February 29, 2020. See Notes 5 and 20 in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2019 for an
explanation of the Big River Steel put and call options. These
items will not impact adjusted EBITDA, adjusted net loss or
adjusted diluted net loss per share.
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 restructuring charges and other
adjustments 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 restructuring charges and other adjustments 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: |
|
John Ambler |
Kevin Lewis |
Vice President |
Vice President |
Corporate Communications |
Investor Relations |
T – (412) 433-2407 |
T – (412) 433-6935 |
E – joambler@uss.com |
E – klewis@uss.com |
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