U.S. Steel Posts Narrower Loss
July 26 2016 - 7:10PM
Dow Jones News
U.S. Steel Corp. posted a narrower net loss and improved its
full-year guidance for a key earnings metric.
The Pittsburgh company said its European segment posted its best
results since the third quarter of 2008, its flat-rolled segment
returned to profitability, and an improving cost structure has
helped margins.
Second-quarter revenue fell 11% from a year ago to $2.58
billion, compared with the $2.68 billion that Wall Street analysts
expected.
Pricing increases contributed to a strong quarter, and more
price improvement is expected in the second half of the year.
Under current market conditions, the company expects about $850
million in adjusted earnings before interest, taxes, depreciation
and amortization for the full year, compared with its April outlook
of nearly $400 million. The company expects earnings per share of
about 34 cents.
Shares rose 4.6% to $24 in late trading.
U.S. Steel cut thousands of jobs as the industry suffered from
oversupply and a glut of imports, but new U.S. import tariffs have
helped the industry recently.
Overall, U.S. Steel reported a loss of $46 million, or 32 cents
a share, compared with a loss of $261 million, or $1.79 a share, a
year earlier.
Excluding items, the company had a loss of 31 cents a share,
compared with a loss of 79 cents a share a year earlier. Analysts
polled by Thomson Reuters had projected a loss excluding items of
49 cents a share.
U.S. Steel Chief Executive Mario Longhi said in April that the
company expected rising prices and a pickup in demand in the second
quarter, especially in the automotive market.
Mr. Longhi said in a statement Tuesday that "the significant
improvements we have made to our earnings power through our
Carnegie Way transformation will become more apparent as market
prices recover from the very low levels at the end of 2015." He
said the industry is still facing "global overcapacity and unfair
trade practices."
U.S. Steel results follow AK Steel Holding Corp.'s report that
it swung to a second-quarter profit as it reduced its exposure to
spot prices and focused on more profitable coated products.
Meanwhile, Nucor Corp.'s profit rose 87%.
In an April complaint filed with the International Trade
Commission, U.S. Steel demanded penalties on Chinese steel imports
and said Chinese steelmakers conspired to fix prices and stole
trade secrets.
Write to Josh Beckerman at josh.beckerman@wsj.com
(END) Dow Jones Newswires
July 26, 2016 18:55 ET (22:55 GMT)
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