United States Steel Corporation (NYSE: X) today provided second
quarter 2021 guidance. Second quarter 2021 adjusted EBITDA is
expected to be approximately $1.2 billion. Second quarter 2021
adjusted net income is expected to be approximately $880 million
and excludes impacts primarily related to certain restructuring and
asset impairment charges. The Company expects second quarter 2021
adjusted diluted earnings per share to be approximately $3.08.
“Higher steel prices and strong flat-rolled steel demand coupled
with well-run operations are expected to deliver adjusted EBITDA
that more than doubles our first quarter performance,” commented U.
S. Steel President and Chief Executive Officer David B. Burritt.
“Continued strong demand and low steel inventories are empowering
today’s ongoing market improvements. These market fundamentals are
showing no signs of slowing down and have us increasingly confident
of another strong year in 2022.”
Burritt continued, "As a result, we recently announced a new
sustainable non-grain oriented electrical steel line investment at
Big River Steel. This technologically advanced electrical steel
line is expected to be funded by cash generated from Big River
Steel’s robust profitability and cash flow. We continue to evaluate
opportunities to accelerate our transition to a Best for All℠
future while executing our near-term priority to strengthen our
balance sheet.”
U. S. Steel to Fully Redeem Senior Notes Due 2025
U. S. Steel notified the trustee that it has elected to fully
redeem and pay the approximately $718 million aggregate principal
amount of its outstanding 6.875% Senior Notes due 2025 (the
“Notes”). Pursuant to the indenture, the Notes will be redeemed
with cash on hand at a price equal to 101.719% of the principal
amount, plus accrued and unpaid interest to, but excluding, the
redemption date of August 15, 2021.
Today’s announcement is in addition to the aggregate principal
debt repayment of approximately $1.5 billion year to date,
excluding the impact of the Big River Steel debt assumed in
connection with the acquisition.
Adjusted EBITDA Commentary
The Flat-rolled segment is expected to generate more than double
first quarter’s EBITDA. Higher steel selling prices continue to be
reflected in our adjustable contracts and spot selling prices.
Additionally, the absence of seasonal mining headwinds from the
first quarter are also expected to contribute to higher EBITDA
performance, quarter-over-quarter.
The Mini Mill segment is expected to exceed first quarter’s
already industry leading EAF-based performance. Improved
efficiencies from a fully ramped Phase 2 expansion and higher steel
selling prices are expected to contribute to record setting EBITDA
margins for the segment.
Continued strong demand in our European segment and higher steel
prices are expected to deliver increased EBITDA performance
compared to the first quarter. Higher raw material costs,
particularly for iron ore, and increasing costs for emission
allowances are expected to be a continued headwind.
In Tubular, market conditions are steadily improving. Oil and
natural gas rigs are coming back on-line supported by higher oil
and natural gas prices. This is starting to move pipe inventory
within the supply chain and increase customer demand for new
product. We expect near breakeven EBITDA performance in the second
quarter aided by increased customer activity, higher selling
prices, and improved cost performance as we begin consuming more
internally produced rounds from the Fairfield electric arc
furnace.
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,” "may" 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
changes, share of sales and earnings per share changes, anticipated
cost savings, potential capital and operational cash improvements,
anticipated disruptions to our operations and industry due to the
COVID-19 pandemic, changes in global supply and demand conditions
and prices for our products, the integration of Big River Steel in
our existing business, business strategies related to the combined
business, 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 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, 2020, 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
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED EBITDA
GUIDANCE
(Dollars in millions)
Reconciliation to Projected Adjusted
EBITDA Included in Guidance
2Q 2021
Projected net earnings attributable to
United States Steel Corporation included in guidance
$
815
Estimated income tax provision
70
Estimated net interest and other financial
costs
45
Estimated depreciation, depletion, and
amortization
205
Projected EBITDA included in guidance
$
1,135
Estimated second quarter adjustments
65
Projected adjusted EBITDA included in
guidance
$
1,200
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED NET
EARNINGS GUIDANCE
(Dollars in millions, except per share
amounts)
Reconciliation to Projected Adjusted
Net Earnings Attributable to U. S. Steel Included in
Guidance
2Q 2021
Projected net earnings attributable to
United States Steel Corporation included in guidance
$
815
Estimated second quarter adjustments
65
Projected adjusted net earnings
attributable to United States Steel Corporation included in
guidance
$
880
Reconciliation to Projected Adjusted
Diluted Net Earnings Per Share Included in Guidance
2Q 2021
Projected diluted net earnings per share
included in guidance
$
2.85
Estimated second quarter adjustments
0.23
Projected adjusted diluted net earnings
per share included in guidance
$
3.08
Note: The tax provision for the second quarter of 2021 assumes
that domestic deferred tax assets remain subject to a full
valuation allowance. Potential changes to this position remain
subject to further review on a quarterly basis.
Note Regarding Non-GAAP Financial Measures
We present adjusted net earnings, adjusted net earnings per
diluted share, earnings 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, 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, adjusted net earnings per diluted share
and adjusted EBITDA are non-GAAP measures that exclude certain
restructuring and asset impairment charges that are not part of the
Company's core operations. We present adjusted net earnings,
adjusted net earnings per diluted share and adjusted EBITDA to
enhance the understanding of our ongoing operating performance and
established trends affecting our core operations, by excluding
certain restructuring and asset impairment charges that can obscure
underlying trends. U. S. Steel's management considers adjusted net
earnings, adjusted net earnings 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, adjusted net earnings
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, adjusted net earnings 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, adjusted net earnings per diluted share and adjusted
EBITDA should not be considered a substitute for net earnings,
earnings 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.
Founded in 1901, United States Steel Corporation is a leading
steel producer. Together with its subsidiary Big River Steel and an
unwavering focus on safety, the company’s customer-centric Best for
All℠ strategy is advancing a more secure, sustainable future for U.
S. Steel and its stakeholders. With a renewed emphasis on
innovation, U. S. Steel serves the automotive, construction,
appliance, energy, containers, and packaging industries with high
value-added steel products such as U. S. Steel’s proprietary XG3™
advanced high-strength steel. The company also maintains
competitively advantaged iron ore production and has an annual raw
steelmaking capability of 26.2 million net tons. U. S. Steel is
headquartered in Pittsburgh, Pennsylvania, with world-class
operations across the United States and in Central Europe. For more
information, please visit www.ussteel.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20210617005828/en/
John O. Ambler Vice President Corporate Communications T – (412)
433-2407 E – joambler@uss.com
Kevin Lewis Vice President Investor Relations T – (412) 433-6935
E – klewis@uss.com
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