- Net earnings of $214 million, or $1.20 per diluted share
- Adjusted net earnings of $262 million, or $1.46 per diluted share
- Adjusted EBITDA of $451 million
PITTSBURGH, Aug. 01, 2018 (GLOBE NEWSWIRE) — United States Steel Corporation (NYSE: X) reported second quarter 2018 net earnings of $214 million, or $1.20 per diluted share. Adjusted net earnings were $262 million, or $1.46 per diluted share. This compares to second quarter 2017 net earnings of $261 million, or $1.48 per diluted share. Adjusted net earnings for second quarter 2017 were $189 million, or $1.07 per diluted share.
| Earnings Highlights | |||||||||
| Quarter Ended | Six Months Ended | ||||||||
| June 30, | June 30, | ||||||||
| (Dollars in millions, except per share amounts) | 2018 | 2017 | 2018 | 2017 | |||||
| Net Sales | $ | 3,609 | $ | 3,144 | $ | 6,758 | $ | 5,869 | |
| Segment earnings (loss) before interest and income taxes | |||||||||
| Flat-Rolled | $ | 224 | $ | 220 | $ | 257 | $ | 132 | |
| U. S. Steel Europe | 115 | 55 | 225 | 142 | |||||
| Tubular | (35) | (29) | (62) | (86) | |||||
| Other Businesses | 17 | 9 | 28 | 22 | |||||
| Total segment earnings before interest and income taxes | $ | 321 | $ | 255 | $ | 448 | $ | 210 | |
| Other items not allocated to segments | (20) | 72 | (10) | 37 | |||||
| Earnings before interest and income taxes | $ | 301 | $ | 327 | $ | 438 | $ | 247 | |
| Net interest and other financial costs | 75 | 82 | 193 | 163 | |||||
| Income tax provision (benefit) | 12 | (16) | 13 | 3 | |||||
| Net earnings | $ | 214 | $ | 261 | $ | 232 | $ | 81 | |
| Earnings per diluted share | $ | 1.20 | $ | 1.48 | $ | 1.30 | $ | 0.46 | |
| Adjusted net earnings (a) | $ | 262 | $ | 189 | $ | 319 | $ | 44 | |
| Adjusted net earnings per diluted share (a) | $ | 1.46 | $ | 1.07 | $ | 1.79 | $ | 0.25 | |
| Adjusted earnings before interest, income taxes, depreciation and amortization (EBITDA) (a) | $ | 451 | $ | 376 | $ | 706 | $ | 468 | |
(a) Please refer to the non-GAAP Financial Measures section of this document for the reconciliation of these amounts.
Commenting on U. S. Steel’s results, President and Chief Executive Officer David B. Burritt said, “In the second quarter, our team performed well by responding quickly to customer demand. We restarted steelmaking at Granite City ahead of schedule and safely ramped up production and shipments faster than planned. In addition, a very strong shipping performance in late June enabled us to deliver higher than expected earnings.”
2018 Guidance
Commenting on U. S. Steel’s guidance for 2018, Burritt said, “The success to date of our ongoing $2 billion asset revitalization program, as well as our earnings power in the current market, makes us increasingly optimistic about future investments that will drive long-term profitable growth.”
We currently expect that third quarter 2018 adjusted EBITDA will be approximately $525 million. We expect our Flat-rolled segment results to continue to improve as more of our adjustable contract and spot shipments realize the benefit of second quarter increases in index prices, partially offset by higher planned outage costs. We expect results for our Tubular segment to turn positive as selling price increases catch up to the rising substrate costs we saw in the first half of the year. We expect results for our European segment to be lower in the third quarter, primarily due to planned outages that coincide with normal seasonal customer demand patterns.
Based on our progress to date, we are increasing full-year 2018 adjusted EBITDA guidance to approximately $1.85 – $1.90 billion.
The Company will conduct a conference call on second quarter 2018 earnings on Thursday, August 2, at 8:30 a.m. Eastern Daylight. To listen to the webcast of the conference call, and to access the company’s slide presentation and prepared remarks, visit the U. S. Steel website, www.ussteel.com, and click on the “Investors” section. Replays of the conference call will be available on the website after 10:30 a.m. on August 2.
Please refer to the non-GAAP Financial Measures section of this document for the reconciliation of Guidance net earnings to consolidated Guidance adjusted EBITDA.
| UNITED STATES STEEL CORPORATION | ||||||||||||||
| PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited) | ||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||
| June 30, | June 30, | |||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||
| OPERATING STATISTICS | ||||||||||||||
| Average realized price: (a) | ||||||||||||||
| Flat-Rolled ($/net ton) | 819 | 742 | 780 | 731 | ||||||||||
| U. S. Steel Europe ($/net ton) | 707 | 620 | 707 | 607 | ||||||||||
| U. S. Steel Europe (euro/net ton) | 593 | 563 | 584 | 561 | ||||||||||
| Tubular ($/net ton) | 1,449 | 1,234 | 1,420 | 1,173 | ||||||||||
| Steel Shipments (thousands of net tons): (a) | ||||||||||||||
| Flat-Rolled | 2,584 | 2,497 | 5,118 | 4,901 | ||||||||||
| U. S. Steel Europe | 1,156 | 1,157 | 2,283 | 2,266 | ||||||||||
| Tubular | 201 | 180 | 382 | 324 | ||||||||||
| Total Steel Shipments | 3,941 | 3,834 | 7,783 | 7,491 | ||||||||||
| Intersegment Shipments (thousands of net tons): | ||||||||||||||
| Flat-Rolled to Tubular | 65 | 94 | 132 | 94 | ||||||||||
| U. S. Steel Europe to Flat-Rolled | 22 | 25 | 22 | 47 | ||||||||||
| Raw Steel Production (thousands of net tons): | ||||||||||||||
| Flat-Rolled | 2,841 | 2,711 | 5,626 | 5,425 | ||||||||||
| U. S. Steel Europe | 1,308 | 1,285 | 2,600 | 2,543 | ||||||||||
| Raw Steel Capability Utilization: (b) | ||||||||||||||
| Flat-Rolled | 67% | 64% | 67% | 64% | ||||||||||
| U. S. Steel Europe | 105% | 103% | 105% | 103% | ||||||||||
| CAPITAL EXPENDITURES | ||||||||||||||
| Flat-Rolled | $ | 142 | $ | 47 | $ | 318 | $ | 72 | ||||||
| U. S. Steel Europe | 17 | 20 | 38 | 34 | ||||||||||
| Tubular | 13 | 4 | 24 | 11 | ||||||||||
| Other Businesses | 1 | 2 | 1 | 3 | ||||||||||
| Total | $ | 173 | $ | 73 | $ | 381 | $ | 120 | ||||||
(a) Excludes intersegment shipments.
(b) Based on annual raw steel production capability of 17.0 million net tons for Flat-Rolled and 5.0 million net tons for U. S. Steel Europe.
| UNITED STATES STEEL CORPORATION | |||||||||||||||||
| STATEMENT OF OPERATIONS (Unaudited) | |||||||||||||||||
| Quarter Ended | Six Months Ended | ||||||||||||||||
| June 30, | June 30, | ||||||||||||||||
| (Dollars in millions, except per share amounts) | 2018 | 2017 | 2018 | 2017 | |||||||||||||
| NET SALES | $ | 3,609 | $ | 3,144 | $ | 6,758 | $ | 5,869 | |||||||||
| OPERATING EXPENSES (INCOME): | |||||||||||||||||
| Cost of sales (excludes items shown below) | 3,121 | 2,723 | 5,929 | 5,282 | |||||||||||||
| Selling, general and administrative expenses | 92 | 67 | 170 | 148 | |||||||||||||
| Depreciation, depletion and amortization | 130 | 121 | 258 | 258 | |||||||||||||
| Earnings from investees | (19) | (16) | (22) | (20) | |||||||||||||
| Gain associated with retained interest in U. S. Steel Canada Inc. | — | (72) | — | (72) | |||||||||||||
| Restructuring and other charges | — | (1) | — | 32 | |||||||||||||
| Net gain on disposal of assets | (17) | — | (16) | (1) | |||||||||||||
| Other expense (income), net | 1 | (5) | 1 | (5) | |||||||||||||
| Total operating expenses | 3,308 | 2,817 | 6,320 | 5,622 | |||||||||||||
| EARNINGS BEFORE INTEREST AND INCOME TAXES | |||||||||||||||||