X
$27.59
United States Steel
($.33)
(1.18%)
Earnings Details
2nd Quarter June 2018
Wednesday, August 1, 2018 4:20:00 PM
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Summary

United States Steel Beats

United States Steel (X) reported 2nd Quarter June 2018 earnings of $1.46 per share on revenue of $3.6 billion. The consensus earnings estimate was $1.15 per share on revenue of $3.4 billion. The Earnings Whisper number was $1.23 per share. Revenue grew 14.8% on a year-over-year basis.

The company said it now expects 2018 Adjusted EBITDA of $1.85 billion to $1.90 billion. The company's previous guidance was EBITDA of $1.70 billion for the year ending December 31, 2018.

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
$1.46
Earnings Whisper
$1.23
Consensus Estimate
$1.15
Reported Revenue
$3.61 Bil
Revenue Estimate
$3.38 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

United States Steel Corporation Reports Second Quarter 2018 Results

  • 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)20182017 20182017
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 Europe11555 225142
Tubular(35)(29) (62)(86)
Other Businesses179 2822
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 costs7582 193163
Income tax provision (benefit)12(16) 133
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-Rolled2,584 2,497 5,118 4,901
  U. S. Steel Europe1,156 1,157 2,283 2,266
  Tubular201 180 382 324
   Total Steel Shipments3,941 3,834 7,783 7,491
           
 Intersegment Shipments (thousands of net tons):       
  Flat-Rolled to Tubular65 94 132 94
  U. S. Steel Europe to Flat-Rolled22 25 22 47
 Raw Steel Production (thousands of net tons):       
  Flat-Rolled2,841 2,711 5,626 5,425
  U. S. Steel Europe1,308 1,285 2,600 2,543
 Raw Steel Capability Utilization: (b)       
  Flat-Rolled67% 64% 67% 64%
  U. S. Steel Europe105% 103% 105% 103%
           
CAPITAL EXPENDITURES       
 Flat-Rolled$142 $47 $318 $72
 U. S. Steel Europe17 20 38 34
 Tubular13 4 24 11
 Other Businesses1 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 expenses92  67  170  148 
 Depreciation, depletion and amortization130  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), net1  (5)  1  (5) 
          
 Total operating expenses3,308  2,817  6,320  5,622 
          
EARNINGS BEFORE INTEREST AND INCOME TAXES301  327  438  247 
Net interest and other financial costs (a)75  82  193  163 
          
 EARNINGS BEFORE INCOME TAXES226  245  245  84 
Income tax provision (benefit)12  (16)  13  3 
          
Net earnings214  261  232  81 
 Less: Net earnings (loss) attributable to noncontrolling interests       
NET EARNINGS ATTRIBUTABLE TO       
 UNITED STATES STEEL CORPORATION$214  $261  $232  $81 
          
COMMON STOCK DATA:       
          
Net earnings per share attributable to       
United States Steel Corporation stockholders:       
 Basic $1.21  $1.49  $1.32  $0.46 
 Diluted $1.20  $1.48  $1.30  $0.46 
Weighted average shares, in thousands       
 Basic 177,027  174,797  176,594  174,521 
 Diluted 178,903  176,028  178,485  176,319 
Dividends paid per common share$0.05  $0.05  $0.10  $0.10 

(a) Includes $17 million and $14 million for the three months ended June 30, 2018 and 2017, respectively, and $34 million and $32 million for the six months ended June 30, 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)
       
    Six Months Ended
    June 30,
(Dollars in millions) 2018 2017
Cash provided by (used in) operating activities:   
 Net earnings $232  $81 
 Depreciation, depletion and amortization258  258 
 Gain associated with retained interest in U. S. Steel Canada Inc.  (72) 
 Restructuring and other charges  32 
 Loss on debt extinguishment74  1 
 Pensions and other postretirement benefits37  31 
 Deferred income taxes(1)  2 
 Net gain on disposal of assets(16)  (1) 
 Working capital changes(242)  (199) 
 Income taxes receivable/payable(2)  20 
 Other operating activities(47)  90 
  Total 293  243 
       
Cash used in investing activities:   
 Capital expenditures (381)  (120) 
 Disposal of assets 1   
 Other investing activities (1)   
  Total (381)  (120) 
       
Cash provided by (used in) financing activities:   
 Issuance of long-term debt, net of financing costs 640   
 Repayment of long-term debt (874)  (108) 
 Receipts from exercise of stock options 33  13 
 Dividends paid (18)  (18) 
 Taxes paid for equity compensation plans (8)  (10) 
  Total (227)  (123) 
       
Effect of exchange rate changes on cash(10)  10 
       
Net (decrease) increase in cash, cash equivalents and restricted cash(325)  10 
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)$1,272  $1,565 

(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)
      
   June 30 Dec. 31
(Dollars in millions) 2018 2017
Cash and cash equivalents$1,231 $1,553 
Receivables, net1,656 1,379 
Inventories1,848 1,738 
Other current assets77 85 
 Total current assets4,812 4,755 
Property, plant and equipment, net4,401 4,280 
Investments and long-term receivables, net498 480 
Intangible assets, net162 167 
Other assets185 180 
      
 Total assets $10,058 $9,862 
      
Accounts payable and other accrued liabilities$2,331 $2,170 
Payroll and benefits payable386 347 
Short-term debt and current maturities of long-term debt4 3 
Other current liabilities181 201 
 Total current liabilities2,902 2,721 
Long-term debt, less unamortized discount and debt issuance costs2,541 2,700 
Employee benefits692 759 
Other long-term liabilities317 361 
United States Steel Corporation stockholders' equity3,605 3,320 
Noncontrolling interests1 1 
      
 Total liabilities and stockholders' equity$10,058 $9,862 


 
  UNITED STATES STEEL CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED EBITDA
         
  Quarter Ended Six Months Ended
  June 30, June 30,
(Dollars in millions)2018 2017 2018 2017
Reconciliation to Adjusted EBITDA       
 Net earnings attributable to United States Steel Corporation$214  $261  $232  $81 
 Income tax provision (benefit)12  (16)  13  3 
 Net interest and other financial costs75  82  193  163 
 Depreciation, depletion and amortization expense130  121  258  258 
 EBITDA431  448  696  505 
 Gain on equity investee transactions(18)    (18)   
 Granite City Works restart costs36    36   
 Granite City Works adjustment to temporary idling charges2    (8)   
 Gain associated with retained interest in U. S. Steel Canada Inc.  (72)    (72) 
 Loss on shutdown of certain tubular assets      35 
 Adjusted EBITDA$451  $376  $706  $468 


 
UNITED STATES STEEL CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED NET EARNINGS
         
  Quarter Ended Six Months Ended
  June 30, June 30,
(Dollars in millions, except per share amounts) (a)2018 2017 2018 2017
Reconciliation to adjusted net earnings (loss) attributable to United States Steel Corporation       
 Net earnings attributable to United States Steel Corporation$214  $261  $232  $81 
 Gain on equity investee transactions(18)    (18)   
 Granite City Works restart costs36    36   
 Granite City Works adjustment to temporary idling charges2    (8)   
 Loss on debt extinguishment and other related costs28    77   
 Gain associated with retained interest in U. S. Steel Canada Inc.  (72)    (72) 
 Loss on shutdown of certain tubular assets      35 
 Total adjustments48  (72)  87  (37) 
 Adjusted net earnings attributable to United States Steel Corporation$262  $189  $319  $44 
         
Reconciliation to adjusted diluted net earnings (loss) per share       
 Diluted net earnings per share$1.20  $1.48  $1.30  $0.46 
 Gain on equity investee transactions(0.10)    (0.10)   
 Granite City Works restart costs0.20    0.20   
 Granite City Works adjustment to temporary idling charges0.01    (0.04)   
 Loss on debt extinguishment and other related costs0.15    0.43   
 Gain associated with retained interest in U. S. Steel Canada Inc.  (0.41)    (0.41) 
 Loss on shutdown of certain tubular assets      0.20 
 Total adjustments0.26  (0.41)  0.49  (0.21) 
 Adjusted diluted net earnings per share$1.46  $1.07  $1.79  $0.25 

(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.

 
 
UNITED STATES STEEL CORPORATION
RECONCILIATION OF ADJUSTED EBITDA GUIDANCE
   Year EndedYear Ended
  Quarter EndedDec. 31Dec. 31
  Sept. 3020182018
(Dollars in millions)2018(Low end of range)(High end of range)
Reconciliation to Projected Adjusted EBITDA Included in Guidance   
 Projected net earnings attributable to United States Steel Corporation included in Guidance$288 $925 $975 
 Estimated income tax expense22 50 50 
 Estimated net interest and other financial costs61 315 315 
 Estimated depreciation, depletion and amortization129 520 520 
 Gain on equity investee transactions (18) (18) 
 Granite City Works blast furnace B restart costs 36 36 
 Estimated Granite City Works blast furnace A restart costs25 30 30 
 Granite City Works adjustment to temporary idling charges (8) (8) 
 Projected adjusted EBITDA included in Guidance$525 $1,850 $1,900 
           

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.  EBITDA is also used by analysts to refine and improve the accuracy of their financial models that utilize enterprise value.

Adjusted net earnings (loss) and adjusted net earnings (loss) per diluted share are non-GAAP measures that exclude the effects of gains (losses) on the sale of ownership interests in equity investees, facility restart costs, gains (losses) associated with our retained interest in U. S. Steel Canada Inc., restructuring charges, significant temporary idling charges and debt extinguishment and other related costs that are not part of the Company's core operations.  Adjusted EBITDA is also a non-GAAP measure that excludes the effects of gains (losses) on the sale of ownership interests in equity investees, facility restart costs, gains (losses) associated with our retained interest in U. S. Steel Canada Inc., restructuring charges and significant temporary idling charges.  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 gains (losses) on the sale of ownership interests in equity investees, facility restart costs, gains (losses) associated with our retained interest in U. S. Steel Canada Inc., restructuring charges, significant temporary idling charges and debt extinguishment and other related costs 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 annual 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.

             
CONTACT: 
             
Media           Investors/Analysts
Meghan Cox           Dan Lesnak
Manager           General Manager
Corporate Communications           Investor Relations
T - (412) 433-6777           T - (412) 433-1184
E - mmcox@uss.com           E - dtlesnak@uss.com
             

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Source: United States Steel Corporation