X
$22.92
United States Steel
$.27
1.19%
Earnings Details
4th Quarter December 2018
Wednesday, January 30, 2019 4:32:00 PM
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Summary

United States Steel Misses

United States Steel (X) reported 4th Quarter December 2018 earnings of $1.82 per share on revenue of $3.7 billion. The consensus earnings estimate was $1.88 per share on revenue of $3.8 billion. The Earnings Whisper number was $1.90 per share. Revenue grew 17.8% on a year-over-year basis.

United States Steel Corp is an integrated steel producer of flat-rolled and tubular products with production operations in North America and Europe.

Results
Reported Earnings
$1.82
Earnings Whisper
$1.90
Consensus Estimate
$1.88
Reported Revenue
$3.69 Bil
Revenue Estimate
$3.75 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

United States Steel Corporation Reports Fourth Quarter and Full-Year 2018 Results

  • Full-year 2018 net earnings of $1,115 million, or $6.25 per diluted share; full-year adjusted net earnings of $957 million, or $5.36 per diluted share
  • Full-year 2018 adjusted EBITDA of $1.76 billion
  • Returned over $110 million of capital to stockholders in 2018, including $75 million of share repurchases

PITTSBURGH, Jan. 30, 2019 (GLOBE NEWSWIRE) -- United States Steel Corporation (NYSE: X) reported full-year 2018 net earnings of $1,115 million, or $6.25 per diluted share.  Adjusted net earnings were $957 million, or $5.36 per diluted share.  This compares to a full-year 2017 net earnings of $387 million, or $2.19 per diluted share.  Adjusted net earnings for 2017 was $341 million, or $1.94 per diluted share.

Fourth quarter 2018 net earnings were $592 million, or $3.34 per diluted share.  Adjusted net earnings for the fourth quarter 2018 were $324 million, or $1.82 per diluted share. This compares to a fourth quarter 2017 net earnings of $159 million, or $0.90 per diluted share. Fourth quarter 2017 adjusted net earnings were $136 million, or $0.76 per diluted share.

Earnings Highlights
   
 Quarter Ended Year Ended
  December 31,   December 31, 
(Dollars in millions, except per share amounts) 2018  2017   2018  2017 
Net Sales$3,691 $3,133  $14,178 $12,250 
Segment earnings (loss) before interest and income taxes             
Flat-Rolled$328 $82  $883 $375 
U. S. Steel Europe62 112  359 327 
Tubular(3)(6) (58)(99)
Other Businesses11 10  55 44 
Total segment earnings before interest and income taxes$398 $198  $1,239 $647 
Other items not allocated to segments(85)(36) (115)22 
Earnings before interest and income taxes$313 $162  $1,124 $669 
Net interest and other financial costs60 92  312 368 
Income tax benefit(339)(89) (303)(86)
Net earnings$592 $159  $1,115 $387 
Earnings per diluted share$3.34 $0.90  $6.25 $2.19 


Adjusted net earnings (a)$324 $136  $957 $341 
Adjusted earnings per diluted share (a)$1.82 $0.76  $5.36 $1.94 
Adjusted earnings before interest, income taxes, depreciation and amortization (EBITDA) (a)$535 $323  $1,760 $1,148 

(a) Please refer to the non-GAAP Financial Measures section of this document for the reconciliation of these amounts.

"We are pleased with both the strong earnings we reported in 2018 and the important progress we made on our strategic objectives," said U. S. Steel President and Chief Executive Officer David B. Burritt.  "We are encouraged by the effectiveness of the investments we are making and remain focused on improving our operating and commercial performance to drive long-term value creation for our stockholders."

The Company currently expects first quarter 2019 adjusted EBITDA to be approximately $225 million, which excludes the expected first quarter impacts of the December 24, 2018 fire at our Clairton coke making facility.

First quarter 2019 EBITDA for the Flat-rolled segment is expected to be higher than first quarter 2018, primarily due to higher average realized selling prices, partially offset by higher raw materials costs.

First quarter 2019 EBITDA for the U. S. Steel Europe segment is expected to be lower than first quarter 2018, primarily due to lower volumes, higher raw materials costs, and an unfavorable change in the U.S. dollar / Euro exchange rate.

First quarter 2019 EBITDA for the Tubular segment is expected to be higher than first quarter 2018, primarily due to higher average realized selling prices and increased volumes, partially offset by higher costs for steel substrate.

The Company will conduct a conference call on fourth quarter and full-year 2018 earnings on Thursday, January 31, at 8:30 a.m. Eastern Standard.  To listen to the webcast of the conference call, visit the U. S. Steel website, www.ussteel.com, and click on the “Investors” section.  For more information on U. S. Steel, visit our website.
Please refer to the non-GAAP Financial Measures section of this document for the reconciliation of Guidance net earnings (loss) to consolidated Guidance EBITDA.


UNITED STATES STEEL CORPORATION
PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited)
        
 Quarter Ended Year Ended
 December 31, December 31,
 2018 2017 2018 2017
OPERATING STATISTICS       
Average realized price: (a)       
Flat-Rolled ($/net ton)823  717  811  726 
U. S. Steel Europe ($/net ton)686  634  693  622 
U. S. Steel Europe (euro/net ton)601  538  586  551 
Tubular ($/net ton)1,488  1,417  1,483  1,253 
Steel Shipments (thousands of net tons): (a)       
Flat-Rolled2,733  2,442  10,510  9,887 
U. S. Steel Europe1,073  1,252  4,457  4,585 
Tubular216  179  780  688 
Total Steel Shipments4,022  3,873  15,747  15,160 
        
Intersegment Shipments (thousands of net tons):       
Flat-Rolled to Tubular66  21  224  158 
U. S. Steel Europe to Flat-Rolled    22  47 
Raw Steel Production (thousands of net tons):       
Flat-Rolled3,334  2,575  11,893  10,820 
U. S. Steel Europe1,213  1,314  5,023  5,091 
Raw Steel Capability Utilization: (b)       
Flat-Rolled78% 60% 70% 64%
U. S. Steel Europe96% 104% 100% 102%
        
CAPITAL EXPENDITURES       
Flat-Rolled$289  $ 182  $820  $388 
U. S. Steel Europe41  21  104  83 
Tubular12  9  45  28 
Other Businesses13  2  32  6 
        
Total$355  $ 214  $1,001  $505 

(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 Year Ended
  December 31, December 31,
(Dollars in millions, except per share amounts)2018 2017 2018 2017
NET SALES $3,691  $3,133  $14,178  $12,250 
         
OPERATING EXPENSES (INCOME):       
Cost of sales (excludes items shown below)3,204  2,748  12,305  10,858 
Selling, general and administrative expenses85  97  336  320 
Depreciation, depletion and amortization137  125  521  501 
Earnings from investees(22) (15) (61) (44)
Gain associated with retained interest in U. S. Steel Canada Inc.      (72)
(Gain) loss on equity investee transactions(20) 19  (38) (2)
Restructuring and other charges  1    31 
Net gain on disposal of assets(3) (3) (6) (5)
Other income, net(3) (1) (3) (6)
Total operating expenses3,378  2,971  13,054  11,581 
         
EARNINGS BEFORE INTEREST AND INCOME TAXES313  162  1,124  669 
Net interest and other financial costs (a)60  92  312  368 
         
EARNINGS BEFORE INCOME TAXES253  70  812  301 
Income tax benefit(339) (89) (303) (86)
         
Net earnings592  159  1,115  387 
Less: Net earnings (loss) attributable to the noncontrolling interests       
NET EARNINGS ATTRIBUTABLE TO UNITED STATES STEEL CORPORATION$592  $159  $1,115  $387 
         
COMMON STOCK DATA:       
         
Net earnings per share attributable to       
United States Steel Corporation stockholders:       
Basic $3.36  $0.91  $6.31  $2.21 
Diluted $3.34  $0.90  $6.25  $2.19 
Weighted average shares, in thousands       
Basic 176,091  175,117  176,633  174,793 
Diluted 177,649  177,210  178,461  176,520 
Dividends paid per common share$0.05  $0.05  $0.20  $0.20 

(a) Includes $16 million and $14 million for the three months ended December 31, 2018 and 2017, respectively, and $69 million and $61 million for the twelve months ended December 31, 2018 and 2017, respectively, of postretirement benefit expense (other than service cost) related to the retrospective presentation change of net periodic benefit cost of our defined benefit pension and other post-employment benefits as a result of the adoption of Accounting Standards Update 2017-07, Compensation - Retirement Benefits on January 1, 2018.


UNITED STATES STEEL CORPORATION
CASH FLOW STATEMENT (Unaudited)
   Year Ended 
   December 31, 
(Dollars in millions)  2018   2017 
Cash provided by operating activities:        
Net earnings $1,115  $387 
Depreciation, depletion and amortization521  501 
Gain associated with retained interest in U. S. Steel Canada Inc.  (72)
Gain on equity investee transactions(38) (2)
Restructuring and other charges  31 
Loss on debt extinguishment98  54 
Pensions and other postretirement benefits77  (16)
Deferred income taxes(329) (72)
Net gain on disposal of assets(6) (5)
Working capital changes(404) 72 
Income taxes receivable/payable(8) (52)
Other operating activities(88)  
 Total 938  826 
      
Cash used in investing activities:   
Capital expenditures (1,001) (505)
Disposal of assets 10  5 
Proceeds from sale of ownership interest in equity method investees30  116 
Other investing activities (2) (2)
 Total (963) (386)
      
Cash (used in) provided by financing activities:   
Revolving credit facilities228   
Issuance of long-term debt, net of financing costs640  737 
Repayment of long-term debt (1,299) (1,127)
Common stock repurchased (75)  
Receipts from exercise of stock options35  20 
Taxes paid for equity compensation plans (8) (10)
Dividends paid(36) (35)
 Total (515) (415)
      
Effect of exchange rate changes on cash(17) 17 
      
Net (decrease) increase in cash, cash equivalents and restricted cash(557) 42 
Cash, cash equivalents and restricted cash at beginning of the year (a)1,597  1,555 
      
Cash, cash equivalents and restricted cash at end of the period (a)$1,040  $1,597 

(a) Includes restricted cash in the beginning-of-period and end-of-period amounts as a result of the retrospective adoption of Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash on January 1, 2018.

UNITED STATES STEEL CORPORATION
CONDENSED BALANCE SHEET (Unaudited)
     
  Dec. 31 Dec. 31
(Dollars in millions) 2018 2017
Cash and cash equivalents$1,000  $1,553 
Receivables, net1,659  1,379 
Inventories2,092  1,738 
Other current assets79  85 
Total current assets4,830  4,755 
Property, plant and equipment, net4,865  4,280 
Investments and long-term receivables, net513  480 
Intangible assets, net158  167 
Other assets616  180 
     
Total assets $10,982  $9,862 
     
Accounts payable$2,535  $2,222 
Payroll and benefits payable440  347 
Short-term debt and current maturities of long-term debt65  3 
Other current liabilities157  201 
Total current liabilities3,197  2,773 
Long-term debt, less unamortized discount and debt issuance costs2,316  2,700 
Employee benefits980  759 
Other long-term liabilities286  309 
United States Steel Corporation stockholders' equity4,202  3,320 
Noncontrolling interests1  1 
     
Total liabilities and stockholders' equity$10,982  $9,862 


UNITED STATES STEEL CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED EBITDA GUIDANCE
  
(Dollars in millions)1Q 2019
Reconciliation to Projected Adjusted EBITDA Included in Guidance
Projected net loss attributable to United States Steel Corporation included in Guidance$(6)
Estimated income tax benefit(1)
Estimated net interest and other financial costs57 
Estimated depreciation, depletion and amortization135 
Projected EBITDA included in Guidance$185 
Expected first quarter impact of the December 24, 2018 fire at the Clairton coke making facility40 
Projected adjusted EBITDA included in Guidance$225 


UNITED STATES STEEL CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED EBITDA
        
 Quarter Ended Year Ended
 Dec. 31 Dec. 31
(Dollars in millions)2018 2017 2018 2017
Reconciliation to Adjusted EBITDA       
Net earnings attributable to United States Steel Corporation$592  $159  $1,115  $387 
Income tax benefit(339) (89) (303) (86)
Net interest and other financial costs60  92  312  368 
Depreciation, depletion and amortization expense137  125  521  501 
EBITDA450  287  1,645  1,170 
United Steelworkers labor agreement signing bonus and related costs88    81   
Gain associated with retained interest in U. S. Steel Canada Inc.      (72)
(Gain) loss on equity investee transactions(20) 19  (38) (2)
Loss on shutdown of certain tubular pipe mill assets      35 
Granite City Works restart and related costs17    80   
Granite City Works temporary idling charges  17  (8) 17 
Adjusted EBITDA$535  $323  $1,760  $1,148 

 

UNITED STATES STEEL CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED NET EARNINGS
        
 Quarter Ended(a) Year Ended(a)
 December 31, December 31,
(Dollars in millions, except per share amounts)2018 2017 2018 2017
Reconciliation to adjusted net earnings attributable to United States Steel Corporation       
Net earnings attributable to United States Steel Corporation$592  $159  $1,115  $387 
United Steelworkers labor agreement signing bonus and related costs88    81   
Reversal of tax valuation allowance(374)   (374)  
Gain associated with retained interest in U. S. Steel Canada Inc.      (72)
(Gain) loss on equity investee transactions(20) 19  (38) (2)
Loss on shutdown of certain tubular pipe mill assets      35 
Loss on debt extinguishment21  22  101  57 
Effect of tax reform  (81)   (81)
Granite City Works restart and related costs17    80   
Granite City Works temporary idling charges  17  (8) 17 
Total adjustments(268) (23) (158) (46)
Adjusted net earnings attributable to United States Steel Corporation$324  $136  $957  $341 
        
Reconciliation to adjusted diluted net earnings per share       
Diluted net earnings per share$3.34  $0.90  $6.25  $2.19 
United Steelworkers labor agreement signing bonus and related costs0.49    0.45   
Reversal of tax valuation allowance(2.11)   (2.11)  
Gain associated with retained interest in U. S. Steel Canada Inc.      (0.41)
(Gain) loss on equity investee transactions(0.11) 0.10  (0.21) (0.01)
Loss on shutdown of certain tubular pipe mill assets      0.20 
Loss on debt extinguishment0.12  0.12  0.57  0.33 
Effect of tax reform  (0.46)   (0.46)
Granite City Works restart and related costs0.09    0.45   
Granite City Works temporary idling charges  0.10  (0.04) 0.10 
Total adjustments(1.52) (0.14) (0.89) (0.25)
Adjusted diluted net earnings per share$1.82  $0.76  $5.36  $1.94 

(a) The adjustments included in this table have been tax effected at a 0% tax rate due to the recognition of a full valuation allowance on our domestic deferred tax assets.

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 effects of the United Steelworkers (USW) labor agreement signing bonus and related costs, gains associated with our retained interest in U. S. Steel Canada Inc., gains (losses) on the sale of ownership interests in equity investees, restructuring charges, significant temporary idling charges, restart and related costs associated with Granite City Works, debt extinguishment and other related costs, the reversal of our tax valuation allowance and effects of tax reform that are not part of the Company's core operations.  Adjusted EBITDA is also a non-GAAP measure that excludes the effects of the USW agreement signing bonus and related costs, gains associated with our retained interest in U. S. Steel Canada Inc., gains (losses) on the sale of ownership interests in equity investees, restructuring charges, significant temporary idling charges and restart and related costs associated with Granite City Works.  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 effects of events 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 or in preparing the Company’s financial Guidance.  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 27 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, 2017, in our Quarterly Report on Form 10-Q for the quarter ended June 30, 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.


2019-003

CONTACTS: 
MediaInvestors/Analysts
Meghan CoxDan Lesnak
ManagerGeneral Manager
Corporate CommunicationsInvestor Relations
T - (412) 433-6777T - (412) 433-1184
E - mmcox@uss.comE - dtlesnak@uss.com

 

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Source: United States Steel Corporation