United States Steel Corporation Reports First Quarter 2019 Results
May 02 2019 - 4:05PM
United States Steel Corporation (NYSE: X) reported first
quarter 2019 net earnings of $54 million, or $0.31 per diluted
share. Adjusted net earnings were $81 million, or $0.47 per
diluted share. This compares to first quarter 2018 net
earnings of $18 million, or $0.10 per diluted share. Adjusted
net earnings for first quarter 2018 were $57 million, or $0.32 per
diluted share.
Earnings Highlights |
|
|
|
|
|
|
Quarter Ended |
|
|
March 31, |
(Dollars in millions, except per share
amounts) |
2019 |
2018 |
Net Sales |
$ |
3,499 |
|
$ |
3,149 |
|
Segment earnings (loss) before interest
and income taxes |
|
|
Flat-Rolled |
$ |
95 |
|
$ |
33 |
|
U. S. Steel Europe |
29 |
|
110 |
|
Tubular |
10 |
|
(27 |
) |
Other Businesses |
8 |
|
11 |
|
Total segment earnings before interest
and income taxes |
$ |
142 |
|
$ |
127 |
|
Other items not allocated to segments |
(31 |
) |
10 |
|
Earnings before interest and income
taxes |
$ |
111 |
|
$ |
137 |
|
Net interest and other financial
costs |
49 |
|
118 |
|
Income tax provision |
8 |
|
1 |
|
Net earnings |
$ |
54 |
|
$ |
18 |
|
Earnings per diluted share |
$ |
0.31 |
|
$ |
0.10 |
|
Adjusted net earnings(a) |
$ |
81 |
|
$ |
57 |
|
Adjusted earnings per diluted share (a) |
$ |
0.47 |
|
$ |
0.32 |
|
Adjusted earnings before interest, income taxes,
depreciation and amortization (EBITDA) (a) |
$ |
285 |
|
$ |
255 |
|
(a)
Please refer to the non-GAAP Financial Measures section of this
document for the reconciliation of these amounts. |
“Over the past few years, we have made strategic
investments across our footprint, with a focus on our most critical
flat-rolled steelmaking assets,” commented President and Chief
Executive Officer David B. Burritt. “Our progress continued
in the first quarter as we delivered strong financial
results. Today's announcement of a state-of-the-art endless
casting and rolling line at Mon Valley Works further strengthens
our competitive position and will generate long-term value for our
stockholders, customers, employees and community.”The Company will
conduct a conference call on first quarter 2019 earnings on Friday,
May 3, at 8:30 a.m. Eastern Daylight. To listen to the
webcast of the conference call, and to access the company's slide
presentation, visit the U. S. Steel website,
www.ussteel.com, and click on the “Investors” section. Replays of
the conference call will be available on the website after 10:30
a.m. on May 3.
UNITED STATES STEEL CORPORATION |
PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
|
March 31, |
|
|
|
|
2019 |
|
2018 |
OPERATING
STATISTICS |
|
|
|
|
Average
Realized Price: (a) |
|
|
|
|
|
Flat-Rolled
($/net ton) |
798 |
|
|
740 |
|
|
|
U. S. Steel
Europe ($/net ton) |
670 |
|
|
707 |
|
|
|
U. S. Steel
Europe (€/net ton) |
590 |
|
|
575 |
|
|
|
Tubular
($/net ton) |
1,549 |
|
|
1,387 |
|
|
Steel
Shipments (thousands of net tons): (a) |
|
|
|
|
|
Flat-Rolled |
2,725 |
|
|
2,534 |
|
|
|
U. S. Steel
Europe |
1,064 |
|
|
1,127 |
|
|
|
Tubular |
207 |
|
|
179 |
|
|
|
|
Total Steel
Shipments |
3,996 |
|
|
3,840 |
|
|
|
|
|
|
|
|
|
Intersegment Shipments (thousands of net tons): |
|
|
|
|
|
Flat-Rolled
to Tubular |
81 |
|
|
67 |
|
|
Raw Steel
Production (thousands of net tons): |
|
|
|
|
|
Flat-Rolled |
3,075 |
|
|
2,784 |
|
|
|
U. S. Steel
Europe |
1,159 |
|
|
1,292 |
|
|
Raw Steel
Capability Utilization: (b) |
|
|
|
|
|
Flat-Rolled |
73 |
% |
|
66 |
% |
|
|
U. S. Steel
Europe |
94 |
% |
|
105 |
% |
|
|
|
|
|
|
|
|
CAPITAL
EXPENDITURES |
|
|
|
|
Flat-Rolled |
$ |
247 |
|
|
$ |
176 |
|
|
|
U. S. Steel
Europe |
34 |
|
|
21 |
|
|
|
Tubular |
19 |
|
|
11 |
|
|
|
Other
Businesses |
2 |
|
|
— |
|
|
|
|
Total |
$ |
302 |
|
|
$ |
208 |
|
(a) Excludes intersegment
transfers. |
(b) Based on annual raw steel
production capability of 17.0 million net tons for Flat-Rolled
and 5.0 million net tons for USSE. |
UNITED STATES STEEL CORPORATION |
STATEMENT OF OPERATIONS (Unaudited) |
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
March 31, |
(Dollars in millions, except per share amounts) |
2019 |
|
2018 |
NET
SALES |
|
$ |
3,499 |
|
|
$ |
3,149 |
|
|
|
|
|
|
|
OPERATING
EXPENSES (INCOME): |
|
|
|
|
Cost of
sales (excludes items shown below) |
3,172 |
|
|
2,808 |
|
|
Selling,
general and administrative expenses |
78 |
|
|
78 |
|
|
Depreciation, depletion and amortization |
143 |
|
|
128 |
|
|
Earnings
from investees |
(9 |
) |
|
(3 |
) |
|
Net loss on
disposal of assets |
4 |
|
|
1 |
|
|
Total
operating expenses |
|
3,388 |
|
|
3,012 |
|
|
|
|
|
|
|
EARNINGS
BEFORE INTEREST AND INCOME TAXES |
111 |
|
|
137 |
|
Net
interest and other financial costs |
49 |
|
|
118 |
|
|
EARNINGS
BEFORE INCOME TAXES |
62 |
|
|
19 |
|
Income tax
provision |
8 |
|
|
1 |
|
Net
earnings |
|
54 |
|
|
18 |
|
|
Less: Net
earnings attributable to |
|
|
|
|
noncontrolling interests |
— |
|
|
— |
|
NET
EARNINGS ATTRIBUTABLE TO |
|
|
|
|
UNITED
STATES STEEL CORPORATION |
$ |
54 |
|
|
$ |
18 |
|
|
|
|
|
|
|
COMMON
STOCK DATA: |
|
|
|
|
|
|
|
|
|
Net
earnings per share attributable to |
|
|
|
United States Steel Corporation stockholders: |
|
|
|
|
-Basic |
|
$ |
0.31 |
|
|
$ |
0.10 |
|
|
-Diluted |
|
$ |
0.31 |
|
|
$ |
0.10 |
|
Weighted
average shares, in thousands |
|
|
|
|
-Basic |
|
173,241 |
|
|
176,157 |
|
|
-Diluted |
|
174,545 |
|
|
178,289 |
|
Dividends paid per common share |
$ |
0.05 |
|
|
$ |
0.05 |
|
UNITED STATES STEEL CORPORATION |
CASH FLOW STATEMENT (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
|
March 31, |
(Dollars in millions) |
|
2019 |
|
2018 |
Cash
provided by (used in) operating activities: |
|
|
|
|
Net earnings |
|
$ |
54 |
|
|
$ |
18 |
|
|
Depreciation, depletion and amortization |
|
143 |
|
|
128 |
|
|
Loss on
debt extinguishment |
|
— |
|
|
46 |
|
|
Pensions
and other postretirement benefits |
|
30 |
|
|
22 |
|
|
Deferred
income taxes |
|
6 |
|
|
— |
|
|
Net loss on
disposal of assets |
|
4 |
|
|
1 |
|
|
Working
capital changes |
|
(247 |
) |
|
(310 |
) |
|
Income
taxes receivable/payable |
|
41 |
|
|
(8 |
) |
|
Other
operating activities |
|
(2 |
) |
|
4 |
|
|
|
Total |
|
29 |
|
|
(99 |
) |
|
|
|
|
|
|
|
Cash used
in investing activities: |
|
|
|
|
|
Capital
expenditures |
|
(302 |
) |
|
(208 |
) |
|
|
Total |
|
(302 |
) |
|
(208 |
) |
|
|
|
|
|
|
|
Cash
provided by (used in) financing activities: |
|
|
|
|
Issuance of
long-term debt, net of financing costs |
— |
|
|
640 |
|
|
Repayment
of long-term debt |
|
— |
|
|
(538 |
) |
|
Common
stock repurchased |
|
(42 |
) |
|
— |
|
|
Dividends
paid |
|
(9 |
) |
|
(9 |
) |
|
Receipts
from exercise of stock options |
|
— |
|
|
30 |
|
|
Taxes paid
for equity compensation plans |
|
(5 |
) |
|
(6 |
) |
|
|
Total |
|
(56 |
) |
|
117 |
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash |
|
(2 |
) |
|
10 |
|
|
|
|
|
|
|
|
Net
decrease in cash, cash equivalents and restricted cash |
(331 |
) |
|
(180 |
) |
Cash, cash
equivalents and restricted cash at beginning of the year |
1,040 |
|
|
1,597 |
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash at end of
the period |
$ |
709 |
|
|
$ |
1,417 |
|
UNITED STATES STEEL CORPORATION |
CONDENSED BALANCE SHEET (Unaudited) |
|
|
|
|
|
|
|
|
|
March 31, |
|
Dec 31, |
(Dollars in millions) |
|
2019 |
|
2018 |
Cash and
cash equivalents |
$ |
676 |
|
|
$ |
1,000 |
|
Receivables, net |
|
1,729 |
|
|
1,659 |
|
Inventories |
|
2,133 |
|
|
2,092 |
|
Other
current assets |
|
92 |
|
|
79 |
|
|
Total
current assets |
4,630 |
|
|
4,830 |
|
Operating
lease assets |
234 |
|
|
— |
|
Property,
plant and equipment, net |
4,989 |
|
|
4,865 |
|
Investments
and long-term receivables, net |
535 |
|
|
513 |
|
Intangible
assets, net |
156 |
|
|
158 |
|
Deferred
income tax benefits |
427 |
|
|
445 |
|
Other
assets |
|
181 |
|
|
171 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
11,152 |
|
|
$ |
10,982 |
|
|
|
|
|
|
|
Accounts
payable and other accrued liabilities |
$ |
2,547 |
|
|
$ |
2,535 |
|
Payroll and
benefits payable |
333 |
|
|
440 |
|
Short-term
debt and current maturities of long-term debt |
66 |
|
|
65 |
|
Other
current liabilities |
|
194 |
|
|
157 |
|
|
Total
current liabilities |
3,140 |
|
|
3,197 |
|
Noncurrent
operating lease liabilities |
185 |
|
|
— |
|
Long-term
debt, less unamortized discount and debt issuance costs |
2,326 |
|
|
2,316 |
|
Employee
benefits |
|
954 |
|
|
980 |
|
Other
long-term liabilities |
311 |
|
|
286 |
|
United
States Steel Corporation stockholders' equity |
4,235 |
|
|
4,202 |
|
Noncontrolling interests |
1 |
|
|
1 |
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
$ |
11,152 |
|
|
$ |
10,982 |
|
UNITED STATES STEEL CORPORATION |
NON-GAAP FINANCIAL MEASURES |
RECONCILIATION OF ADJUSTED EBITDA |
|
|
|
|
|
|
|
Quarter Ended |
|
|
March 31, |
(Dollars in millions) |
2019 |
|
2018 |
Reconciliation to Adjusted EBITDA |
|
|
|
|
Net earnings
attributable to United States Steel Corporation |
$ |
54 |
|
|
$ |
18 |
|
|
Income tax
provision |
8 |
|
|
1 |
|
|
Net interest and other
financial costs |
49 |
|
|
118 |
|
|
Depreciation, depletion
and amortization expense |
143 |
|
|
128 |
|
|
EBITDA |
254 |
|
|
265 |
|
|
Clairton coke making
facility fire |
31 |
|
|
— |
|
|
Granite City Works
adjustment to temporary idling charges |
— |
|
|
(10 |
) |
|
Adjusted
EBITDA |
285 |
|
|
255 |
|
UNITED STATES STEEL CORPORATION |
NON-GAAP FINANCIAL MEASURES |
RECONCILIATION OF ADJUSTED NET EARNINGS (LOSS) |
|
|
|
|
|
|
|
Quarter Ended(a) |
|
|
March 31, |
(Dollars in millions, except per share amounts) |
2019 |
|
2018 |
Reconciliation to adjusted net
earnings attributable to United States Steel Corporation |
|
|
|
|
Net earnings
attributable to United States Steel Corporation |
$ |
54 |
|
|
$ |
18 |
|
|
Clairton coke making
facility fire |
27 |
|
|
— |
|
|
Granite City Works
adjustment to temporary idling charges |
— |
|
|
(10 |
) |
|
Loss on debt
extinguishment and other related costs |
— |
|
|
49 |
|
|
Total
adjustments |
27 |
|
|
39 |
|
|
Adjusted net earnings
attributable to United States Steel Corporation |
$ |
81 |
|
|
$ |
57 |
|
|
|
|
|
|
Reconciliation to adjusted diluted net earnings per share |
|
|
|
|
Diluted net earnings
per share |
$ |
0.31 |
|
|
$ |
0.10 |
|
|
Clairton coke making
facility fire |
0.16 |
|
|
— |
|
|
Granite City Works
adjustment to temporary idling charges |
— |
|
|
(0.05 |
) |
|
Loss on debt
extinguishment and other related costs |
— |
|
|
0.27 |
|
|
Total
adjustments |
0.16 |
|
|
0.22 |
|
|
Adjusted
diluted net earnings per share |
$ |
0.47 |
|
|
$ |
0.32 |
|
(a) The
adjustment included in this table for the quarter ended March 31,
2019 has been tax effected. The adjustments for the quarter
ended March 31, 2018 have not been tax effected due to the full
valuation allowance on our domestic deferred tax assets in
2018. |
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) and adjusted net
earnings (loss) per diluted share are non-GAAP measures that
exclude the financial effects of the Clairton coke making facility
fire, significant temporary idling charges and adjustments to those
charges and debt extinguishment and other related costs that are
not part of the Company's core operations. Adjusted EBITDA is
also a non-GAAP measure that excludes the financial effects of the
Clairton coke making facility fire and significant temporary idling
charges and adjustments to those charges. 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, significant temporary idling charges and
adjustments to those charges and debt extinguishment and other
related costs 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. A consolidated statement of
operations (unaudited), consolidated cash flow statement
(unaudited), condensed consolidated balance sheet (unaudited) and
preliminary supplemental statistics (unaudited) for
U. S. Steel are attached.
CAUTIONARY NOTE REGARDING 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
growth, share of sales and earnings per share growth, 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.
|
CONTACTS:MediaMeghan
CoxManagerCorporate CommunicationsT - (412) 433-6777E -
mmcox@uss.com |
Investors/AnalystsKevin
LewisGeneral ManagerInvestor RelationsT - (412) 433-6935E -
KLewis@uss.com |
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