Steel Mills
US Steel Reports Best Operating Results Since 2008
Written by Sandy Williams
October 28, 2014
US Steel reports a third quarter net loss of $207 million compared to a loss of $1.791 billion during the second quarter 2014. Results include non-cash restructuring costs and $45 million in gains from sale of real estate. Adjusted net income was $325 million.
Sales rose 11 percent to $4.59 billion and shipments were up 7.5 percent to 5,107,000 tons. Flat rolled income (profits) increased to $347 million, compared to $30 million in second quarter and $82 million in 3Q 2013. US Steel Europe income totaled $29 million, Tubular steel segment income totaled $69 million and other businesses $34 million.
“We experienced a significant improvement in total reportable segments and other businesses income from operations in the third quarter, the highest level since the market peak in 2008. Steel market conditions in the U.S. have remained stable and our operations have performed well, particularly our Flat-rolled segment, where we returned to more normal operating levels and income from operations increased by over $300 million from the second quarter. Our results reflect the significant improvement in our earnings power from our Carnegie Way transformation efforts.”
U.S. flat rolled shipments totaled 3.2 million tons in third quarter at an average realized net price per ton of $786. The flat rolled segment results included a $20 million operating loss for US Steel Canada for the period prior to the CCAA filing on September 16 (Canadian bankruptcy filing).
Raw steel production for the quarter totaled 4,675,000 tons (1,111,000 tons at US Steel Europe). U.S. flat rolled capacity utilization was 85 percent. As a result of the CCAA filing and deconsolidation of US Steel Canada, US Steel’s annual raw steel production capability for flat-rolled is now at 19.4 million tons.
Fourth quarter results for the flat-rolled division are expected to decrease from the third quarter but still exceed $100 million. The reline of the Mon Valley Works blast furnace and planned maintenance projects at Granite City and Great lakes are expected to cost approximately $150 million in fourth quarter.
Flat rolled shipments no longer include US Steel Canada and are expected to drop 10 percent or more from the 3.2 million net tons shipped in third quarter. A decline in average realized prices is anticipated due to weaker spot market conditions and holiday seasonality.
The positive outcome of the OCTG trade suit will help improve pricing in the tubular segment in the fourth quarter as well as an improved product mix. Shipments are expected to decrease due to the indefinite idling of McKeesport and Bellville facilities.
Sandy Williams
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