United States Steel Corporation (NYSE: X) today provided third
quarter 2022 guidance. Third quarter 2022 adjusted EBITDA is
expected to be approximately $825 million. Third quarter 2022
adjusted net earnings per diluted share is expected to be in the
range of $1.90 to $1.95.
“The third quarter marks another important step towards our Best
for All® future,” commented U. S. Steel President and Chief
Executive Officer David B. Burritt. “We continue to operate from a
position of strength and are better prepared to create value in
today’s market than ever before. We’ve repaid over $3 billion of
debt, extended our maturity profile, and built a strong cash
position to pre-fund our strategy. Our key projects remain on-time
and on-budget and we continued to return cash to stockholders in
the quarter.”
Burritt concluded, “I am pleased with our record safety
performance and continued focus on quality, delivery and
reliability for our customers. We expect to deliver a solid third
quarter, even as the business continues to respond to the market
headwinds that have accelerated over the quarter. We have quickly
adjusted our integrated steelmaking operating footprint to better
match our order book and expect our Tubular segment to deliver
another quarter of earnings growth.”
Recent Footprint Actions
The Company has responded quickly to balance steel supply with
customer demand. Below is a summary of actions taken or recently
announced. The Company will continue to monitor its order book and
will adjust the footprint to support customers’ needs.
North American Flat-rolled
Segment:
- Blast Furnace #3 at Mon Valley Works: As previously
communicated on the July earnings call, the Company pulled forward
a planned 30-day outage on blast furnace #3 at Mon Valley Works
from October to September. Work on the blast furnace began on
September 3. Blast furnace #3 has approximately 1.4 million net
tons of annual raw steel equivalent capability.
- Blast Furnace #8 at Gary Works: The Company temporarily idled
blast furnace #8 at Gary Works due to market conditions and
continued high levels of imports. Blast furnace #8 has
approximately 1.5 million net tons of annual raw steel equivalent
capability.
- Tin Line #5 at Gary Works: The Company temporarily idled tin
line #5 at Gary Works due to market conditions and elevated levels
of tin product imports. Tin line #5 has approximately 140,000 net
tons of annual capability.
U. S. Steel Europe Segment:
- Blast Furnace #2 at U. S. Steel Kosice (USSK): The Company
pulled forward a planned 60-day outage on blast furnace #2 at USSK
from October to September. Work on the blast furnace began on
September 4. Blast furnace #2 has approximately 1.7 million net
tons of annual raw steel equivalent capability.
Stockholder Returns Update
Quarter to date, the Company has repurchased approximately $177
million of common stock, including $127 million previously
disclosed as part of the prior $800 million stock buyback
authorization completed in July. As of September 14, 2022, there is
approximately $450 million remaining under the Company’s current
$500 million stock buyback authorization.
Third Quarter Adjusted EBITDA Commentary
The Flat-rolled segment’s adjusted EBITDA is expected to be
lower than the second quarter. Accelerating market headwinds in the
third quarter negatively impacted demand across most end-markets,
which is expected to result in lower shipment volumes. Supply chain
issues in automotive and appliance end-markets continue, while
containers and packaging has softened, and service center buyers
remain on the sidelines. Fixed price contracts in our Flat-rolled
segment are expected to limit the negative impact to the segment’s
average selling price from the flow-through of lower steel selling
prices in spot business and monthly contracts.
The Mini Mill segment’s adjusted EBITDA is expected to be
significantly lower than the second quarter’s strong performance.
Weaker demand and significantly reduced average selling prices from
the segment’s exposure to spot selling prices are expected to
negatively impact the segment’s EBITDA performance. In addition,
high-cost raw materials procured at the onset of the war in Ukraine
began to impact margins in the third quarter and are expected to
impact results through year-end.
The European segment’s adjusted EBITDA is also expected to be
significantly lower than the second quarter. Demand challenges have
accelerated through the third quarter due to seasonal buying
patterns and the increasing effects of the war in Ukraine which has
fueled macroeconomic uncertainty and rising energy costs. Lower
steel prices are increasingly being reflected in the segment’s
majority spot mix exposure. Additionally, headwinds from high-cost
raw materials procured at the onset of the war in Ukraine, an
extended supply chain and surging energy costs are causing
significant margin pressure. These challenges informed our decision
to pull forward a planned blast furnace outage from October into
September to better balance supply with softer demand.
The Tubular segment’s adjusted EBITDA is expected to improve on
last quarter’s strong performance. Continued healthy demand and the
trade case on oil country tubular goods imports is resulting in
higher selling prices and higher expected EBITDA compared to the
second quarter. The segment continues to be advantaged by its
electric arc furnace supplying internally sourced rounds substrate
and the margin expansion from the segment’s proprietary
connections.
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,”
"plan," "goal," "future," “will,” "may" and similar expressions or
by using future dates in connection with any discussion of, among
other things, the construction or operation of new or existing
facilities, the timing, size and form of share repurchase
transactions, operating performance, trends, events or developments
that we expect or anticipate will occur in the future, statements
relating to volume changes, share of sales and earnings per share
changes, anticipated cost savings, potential capital and
operational cash improvements, changes in global supply and demand
conditions and prices for our products, international trade duties
and other aspects of international trade policy, statements
regarding our future strategies, products and innovations,
statements regarding our greenhouse gas emissions reduction goals,
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 loss or
reduction in availability of third party transportation services
and the risks and uncertainties described in “Item 1A Risk Factors”
in our Annual Report on Form 10-K for the year ended December 31,
2021 and those described from time to time in our future reports
filed with the Securities and Exchange Commission.
References to "U. S. Steel," "the Company," "we," "us," and
"our" refer to United States Steel Corporation and its consolidated
subsidiaries unless otherwise indicated by the context.
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED EBITDA
GUIDANCE
(Dollars in millions)
Reconciliation to Projected Adjusted
EBITDA Included in Guidance
3Q 2022
Projected net earnings attributable to
United States Steel Corporation included in guidance
$
485
Estimated income tax provision
150
Estimated net interest and other financial
costs (income)
(35
)
Estimated depreciation, depletion, and
amortization
195
Projected EBITDA included in guidance
$
795
Estimated third quarter adjustments
30
Projected adjusted EBITDA included in
guidance
$
825
UNITED STATES STEEL
CORPORATION
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED NET
EARNINGS GUIDANCE
(Dollars in millions, except per share
amounts)
Reconciliation to Projected Adjusted
Net Earnings Attributable to U. S. Steel Included in
Guidance
3Q 2022
Projected net earnings attributable to
United States Steel Corporation included in guidance
$
485
Estimated third quarter adjustments
23
Projected adjusted net earnings
attributable to United States Steel Corporation included in
guidance
$
508
Reconciliation to Projected Adjusted
Net Earnings Per Diluted Share Included in Guidance
3Q 2022
Projected net earnings per diluted share
included in guidance (mid-point of guidance)
$
1.83
Estimated third quarter adjustments
0.09
Projected adjusted net earnings per
diluted share included in guidance (mid-point of guidance)
$
1.92
Note Regarding Non-GAAP Financial Measures
We present adjusted net earnings, adjusted net earnings per
diluted share, earnings 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, 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, adjusted net earnings per diluted share
and adjusted EBITDA are non-GAAP measures that exclude certain
charges that are not part of the Company’s core operations such as
restructuring or asset impairments (Adjustment Items). We present
adjusted net earnings, adjusted net earnings 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, adjusted net earnings per diluted share and adjusted
EBITDA as alternative measures of operating performance and not
alternative measures of the Company's liquidity and believes these
measures are 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, adjusted net earnings 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 Adjustment Items when evaluating the Company’s
financial performance. Adjusted net earnings, adjusted net earnings
per diluted share and adjusted EBITDA should not be considered a
substitute for net earnings, earnings per diluted share or other
financial measures as computed in accordance with U.S. GAAP and are
not necessarily comparable to similarly titled measures used by
other companies.
Founded in 1901, United States Steel Corporation is a leading
steel producer. With an unwavering focus on safety, the company’s
customer-centric Best for All® strategy is advancing a more secure,
sustainable future for U. S. Steel and its stakeholders. With a
renewed emphasis on innovation, U. S. Steel serves the automotive,
construction, appliance, energy, containers, and packaging
industries with high value-added steel products such as U. S.
Steel’s proprietary XG3™ advanced high-strength steel. The company
also maintains competitively advantaged iron ore production and has
an annual raw steelmaking capability of 22.4 million net tons. U.
S. Steel is headquartered in Pittsburgh, Pennsylvania, with
world-class operations across the United States and in Central
Europe. For more information, please visit www.ussteel.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20220914005984/en/
Arista E. Joyner Manager Financial Communications T – (412)
433-3994 E – aejoyner@uss.com
Kevin Lewis Vice President Investor Relations T – (412) 433-6935
E – klewis@uss.com
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