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CST: 16/09/2019 21:28:25   

United States Steel Corporation Reports First Quarter 2019 Results

137 Days ago

  • Net earnings of $54 million, or $0.31 per diluted share; Adjusted net earnings of $81 million, or $0.47 per diluted share

  • Adjusted EBITDA of $285 million

  • Returned $51 million of capital to stockholders, including $42 million of share repurchases

PITTSBURGH, May 02, 2019 (GLOBE NEWSWIRE) -- United States Steel Corporation (NYSE: X) reported first quarter 2019 net earnings of $54 million, or $0.31 per diluted share.  Adjusted net earnings were $81 million, or $0.47 per diluted share.  This compares to first quarter 2018 net earnings of $18 million, or $0.10 per diluted share.  Adjusted net earnings for first quarter 2018 were $57 million, or $0.32 per diluted share.

Earnings Highlights
       
    Quarter Ended
    March 31,
 (Dollars in millions, except per share amounts) 2019 2018
 Net Sales $ 3,499   $ 3,149  
 Segment earnings (loss) before interest and income taxes    
    Flat-Rolled $ 95   $ 33  
    U. S. Steel Europe 29   110  
    Tubular 10   (27 )
    Other Businesses 8   11  
 Total segment earnings before interest and income taxes $ 142   $ 127  
 Other items not allocated to segments (31 ) 10  
 Earnings before interest and income taxes $ 111   $ 137  
 Net interest and other financial costs 49   118  
 Income tax provision 8   1  
 Net earnings $ 54   $ 18  
 Earnings per diluted share $ 0.31   $ 0.10  


 Adjusted net earnings(a) $ 81   $ 57  
 Adjusted earnings per diluted share (a) $ 0.47   $ 0.32  
 Adjusted earnings before interest, income taxes, depreciation and
 amortization (EBITDA) (a)
$ 285   $ 255  
 (a) Please refer to the non-GAAP Financial Measures section of this document for the reconciliation of these amounts.

“Over the past few years, we have made strategic investments across our footprint, with a focus on our most critical flat-rolled steelmaking assets,” commented President and Chief Executive Officer David B. Burritt.  “Our progress continued in the first quarter as we delivered strong financial results.  Today's announcement of a state-of-the-art endless casting and rolling line at Mon Valley Works further strengthens our competitive position and will generate long-term value for our stockholders, customers, employees and community.”

The Company will conduct a conference call on first quarter 2019 earnings on Friday, May 3, at 8:30 a.m. Eastern Daylight.  To listen to the webcast of the conference call, and to access the company's slide presentation, 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 May 3.


UNITED STATES STEEL CORPORATION
PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited)
             
        Quarter Ended
        March 31,
        2019   2018
OPERATING STATISTICS      
  Average Realized Price: (a)      
    Flat-Rolled ($/net ton) 798     740  
    U. S. Steel Europe ($/net ton) 670     707  
    U. S. Steel Europe (€/net ton) 590     575  
    Tubular ($/net ton) 1,549     1,387  
  Steel Shipments (thousands of net tons): (a)      
    Flat-Rolled 2,725     2,534  
    U. S. Steel Europe 1,064     1,127  
    Tubular 207     179  
      Total Steel Shipments 3,996     3,840  
             
  Intersegment Shipments (thousands of net tons):      
    Flat-Rolled to Tubular 81     67  
  Raw Steel Production (thousands of net tons):      
    Flat-Rolled 3,075     2,784  
    U. S. Steel Europe 1,159     1,292  
  Raw Steel Capability Utilization: (b)      
    Flat-Rolled 73 %   66 %
    U. S. Steel Europe 94 %   105 %
             
  CAPITAL EXPENDITURES    
    Flat-Rolled $ 247     $ 176  
    U. S. Steel Europe 34     21  
    Tubular 19     11  
    Other Businesses 2      
      Total $ 302     $ 208  
(a) Excludes intersegment transfers.
(b) Based on annual raw steel production capability of 17.0 million net tons for Flat-Rolled and 5.0 million net tons for USSE.


UNITED STATES STEEL CORPORATION
STATEMENT OF OPERATIONS (Unaudited)
           
      Quarter Ended
      March 31,
(Dollars in millions, except per share amounts) 2019   2018
NET SALES   $ 3,499     $ 3,149  
           
OPERATING EXPENSES (INCOME):      
  Cost of sales (excludes items shown below) 3,172     2,808  
  Selling, general and administrative expenses 78     78  
  Depreciation, depletion and amortization 143     128  
  Earnings from investees (9 )   (3 )
  Net loss on disposal of assets 4     1  
     Total operating expenses   3,388     3,012  
           
EARNINGS BEFORE INTEREST AND INCOME TAXES 111     137  
Net interest and other financial costs 49     118  
  EARNINGS BEFORE INCOME TAXES 62     19  
Income tax provision 8     1  
Net earnings   54     18  
  Less: Net earnings attributable to      
    noncontrolling interests      
NET EARNINGS ATTRIBUTABLE TO      
  UNITED STATES STEEL CORPORATION $ 54     $ 18  
           
COMMON STOCK DATA:      
           
Net earnings per share attributable to      
  United States Steel Corporation stockholders:      
  -Basic   $ 0.31     $ 0.10  
  -Diluted   $ 0.31     $ 0.10  
Weighted average shares, in thousands      
  -Basic   173,241     176,157  
  -Diluted   174,545     178,289  
Dividends paid per common share $ 0.05     $ 0.05  


UNITED STATES STEEL CORPORATION
CASH FLOW STATEMENT (Unaudited)
             
        Quarter Ended
        March 31,
(Dollars in millions)   2019   2018
Cash provided by (used in) operating activities:      
  Net earnings   $ 54     $ 18  
  Depreciation, depletion and amortization   143     128  
  Loss on debt extinguishment       46  
  Pensions and other postretirement benefits   30     22  
  Deferred income taxes   6      
  Net loss on disposal of assets   4     1  
  Working capital changes   (247 )   (310 )
  Income taxes receivable/payable   41     (8 )
  Other operating activities   (2 )   4  
    Total   29     (99 )
             
Cash used in investing activities:        
  Capital expenditures   (302 )   (208 )
    Total   (302 )   (208 )
             
Cash provided by (used in) financing activities:      
  Issuance of long-term debt, net of financing costs     640  
  Repayment of long-term debt       (538 )
  Common stock repurchased   (42 )    
  Dividends paid   (9 )   (9 )
  Receipts from exercise of stock options       30  
  Taxes paid for equity compensation plans   (5 )   (6 )
    Total   (56 )   117  
             
Effect of exchange rate changes on cash   (2 )   10  
             
Net decrease in cash, cash equivalents and restricted cash (331 )   (180 )
Cash, cash equivalents and restricted cash at beginning of the year 1,040     1,597  
             
Cash, cash equivalents and restricted cash at end of the period $ 709     $ 1,417  


UNITED STATES STEEL CORPORATION
CONDENSED BALANCE SHEET (Unaudited)
           
      March 31,   Dec 31,
(Dollars in millions)   2019   2018
Cash and cash equivalents $ 676     $ 1,000  
Receivables, net   1,729     1,659  
Inventories   2,133     2,092  
Other current assets   92     79  
  Total current assets 4,630     4,830  
Operating lease assets 234      
Property, plant and equipment, net 4,989     4,865  
Investments and long-term receivables, net 535     513  
Intangible assets, net 156     158  
Deferred income tax benefits 427     445  
Other assets   181     171  
           
  Total assets   $ 11,152     $ 10,982  
           
Accounts payable and other accrued liabilities $ 2,547     $ 2,535  
Payroll and benefits payable 333     440  
Short-term debt and current maturities of long-term debt 66     65  
Other current liabilities   194     157  
  Total current liabilities 3,140     3,197  
Noncurrent operating lease liabilities 185      
Long-term debt, less unamortized discount and debt issuance costs 2,326     2,316  
Employee benefits   954     980  
Other long-term liabilities 311     286  
United States Steel Corporation stockholders' equity 4,235     4,202  
Noncontrolling interests 1     1  
           
  Total liabilities and stockholders' equity $ 11,152     $ 10,982  


UNITED STATES STEEL CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED EBITDA
         
    Quarter Ended
    March 31,
(Dollars in millions) 2019   2018
Reconciliation to Adjusted EBITDA      
  Net earnings attributable to United States Steel Corporation $ 54     $ 18  
  Income tax provision 8     1  
  Net interest and other financial costs 49     118  
  Depreciation, depletion and amortization expense 143     128  
  EBITDA 254     265  
  Clairton coke making facility fire 31      
  Granite City Works adjustment to temporary idling charges     (10 )
  Adjusted EBITDA 285     255  


UNITED STATES STEEL CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED NET EARNINGS (LOSS)
         
    Quarter Ended(a)
    March 31,
(Dollars in millions, except per share amounts) 2019   2018
Reconciliation to adjusted net earnings attributable to United States Steel Corporation      
  Net earnings attributable to United States Steel Corporation $ 54     $ 18  
  Clairton coke making facility fire 27      
  Granite City Works adjustment to temporary idling charges     (10 )
  Loss on debt extinguishment and other related costs     49  
     Total adjustments 27     39  
  Adjusted net earnings attributable to United States Steel Corporation $ 81     $ 57  
         
Reconciliation to adjusted diluted net earnings per share      
  Diluted net earnings per share $ 0.31     $ 0.10  
  Clairton coke making facility fire 0.16      
  Granite City Works adjustment to temporary idling charges     (0.05 )
  Loss on debt extinguishment and other related costs     0.27  
     Total adjustments 0.16     0.22  
  Adjusted diluted net earnings per share $ 0.47     $ 0.32  
(a) The adjustment included in this table for the quarter ended March 31, 2019 has been tax effected.  The adjustments for the quarter ended March 31, 2018 have not been tax effected due to the full valuation allowance on our domestic deferred tax assets in 2018.

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 financial effects of the Clairton coke making facility fire, significant temporary idling charges and adjustments to those 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 financial effects of the Clairton coke making facility fire and significant temporary idling charges and adjustments to those 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 financial effects of the Clairton coke making facility fire, significant temporary idling charges and adjustments to those 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.  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 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” 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, 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.

  CONTACTS:
Media
Meghan Cox
Manager
Corporate Communications
T - (412) 433-6777
E - mmcox@uss.com
 
Investors/Analysts
Kevin Lewis
General Manager
Investor Relations
T - (412) 433-6935
E - KLewis@uss.com
 

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