Today, United States Steel Corporation (NYSE: X) provided third
quarter 2019 guidance.
We expect third quarter 2019 adjusted EBITDA to be approximately
$115 million, which excludes approximately $53 million of estimated
third quarter impacts from the December 24, 2018 fire at our
Clairton coke making facility and estimated restructuring
charges. We expect third quarter 2019 adjusted diluted loss
per share to be approximately ($0.35).
Adjusted EBITDA Commentary
The positive flat-rolled steel market indicators experienced
earlier this summer have softened after a brief recovery in steel
selling prices. The impact of falling steel prices through
the second quarter, combined with the impact of a larger than
expected drop in scrap prices on market sentiment, is expected to
negatively impact Flat-rolled earnings in the second half of the
year. As a result, our current assessment of the Flat-rolled
segment suggests two blast furnaces will remain idled through at
least the end of the year. Based on the continued idling of
our two U.S. blast furnaces and current demand forecasts, we now
expect full year Flat-rolled shipments to third party customers to
be approximately 10.7 million tons. We will continue to
evaluate our footprint to best match our production with our order
book.
In Europe, market conditions have continued to deteriorate, as
the dislocation between steel selling prices and raw material costs
continues to result in significant margin compression. Based
on current market conditions and the continued high level of steel
imports into Europe, we do not expect to restart the currently
idled blast furnace this year. As a result, we reiterate our
full year shipment guidance of approximately 3.6 million
tons.
We also continue to execute our labor productivity strategy at
U. S. Steel Europe, which includes a headcount reduction of 2,500
by the end of 2021. To date, we have eliminated approximately
1,800 positions.
We expect our Tubular segment to remain under pressure for the
remainder of the year as market conditions have turned negative and
import levels remain high. Weaker demand for oil country
tubular goods product, which has reduced our full year shipment
expectation to approximately 0.7 million tons, and lower selling
prices for seamless and welded pipe, are expected to have a
significantly negative impact on earnings in the second half of the
year.
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 CORPORATIONNON-GAAP FINANCIAL
MEASURESRECONCILIATION OF ADJUSTED EBITDA GUIDANCE |
|
|
|
|
(Dollars in millions) |
|
|
|
Reconciliation to
Projected Adjusted EBITDA Included in Guidance |
|
3Q 2019 |
|
Projected net loss attributable to United States Steel Corporation
included in guidance |
$ |
(100 |
) |
Estimated income tax benefit |
|
(45 |
) |
Estimated net interest and other financial costs |
|
49 |
|
Estimated depreciation, depletion and amortization |
|
158 |
|
Projected EBITDA included in guidance |
$ |
62 |
|
Estimated third quarter adjustments |
|
53 |
|
Projected adjusted EBITDA included in guidance |
$ |
115 |
|
|
|
|
|
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 |
|
3Q 2019 |
|
Projected net loss attributable to United States Steel Corporation
included in guidance |
$ |
(100 |
) |
Estimated third quarter adjustments 1 |
|
41 |
|
Projected adjusted net loss attributable to United States Steel
Corporation included in guidance |
$ |
(59 |
) |
|
|
|
|
Reconciliation to
Projected Adjusted Diluted Net Loss Per Share Included in
Guidance |
|
3Q 2019 |
|
Projected diluted net loss per share included in guidance |
$ |
(0.59 |
) |
Estimated third quarter adjustments 1 |
|
0.24 |
|
Projected adjusted diluted net loss per share included in
guidance |
$ |
(0.35 |
) |
1 These adjustments have 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 December 24, 2018 Clairton
coke making facility fire 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 the December 24, 2018
Clairton coke making facility fire 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:
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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