PITTSBURGH, December 15, 2022 – United States Steel Corporation (NYSE: X) today provided fourth quarter 2022 guidance. Fourth quarter 2022 adjusted EBITDA is expected to be approximately $375 million. Fourth quarter 2022 adjusted net earnings per diluted share is expected to be in the range of $0.58 to $0.63.
“We remain on-track to deliver our second-best financial year with continued execution of our strategy and $150 million of direct returns to stockholders expected in the quarter,” commented U. S. Steel President and Chief Executive Officer David B. Burritt. “Our expected fourth quarter performance is in-line with commentary provided on our October earnings call. December commercial demand in the U.S. is better and scrap prices have begun to increase this month. Flat-rolled customer inquiries are accelerating and spot steel selling prices are improving.”
Burritt continued, “As discussed during our October earnings call, we continue to work through higher priced metallics in our Mini Mill segment and pressure on our European segment continues from lower demand in the region and higher raw material and energy costs. Our Tubular segment is expected to deliver another incrementally strong quarter.”
Burritt concluded, “We are entering 2023 from a position of strength. Our commissioned pig iron facility at Gary Works will begin delivering cost-advantaged pig iron to Big River Steel in the first half of 2023 and is the latest example of meeting our commitment to deliver our Best for All® initiatives on-time and on-budget. We are progressing on our strategic initiatives with robust cash and liquidity that both pre-funds our strategic investments and supports direct returns to stockholders.”
Recent Footprint Actions
The Company continues to monitor its order book to ensure its footprint supports customers’ needs.
Below is a summary of actions taken or recently announced.
North American Flat-rolled Segment:
- Blast Furnace #3 at Mon Valley Works: Blast furnace #3 remains temporarily idled. As previously communicated on the July earnings call, the Company pulled forward a planned outage on blast furnace #3 at Mon Valley Works from October to September. Blast furnace #3 has approximately 1.4 million net tons of annual raw steel equivalent capability.
- Blast Furnace #8 at Gary Works: Blast furnace #8 remains temporarily idled. As previously communicated, 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: Tin line #5 remains temporarily idled. As previously communicated, 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 #1 at U. S. Steel Kosice (USSK): Blast furnace #1 remains temporarily idled. The Company intends to restart production at blast furnace #1 in early January. The Company temporarily idled blast furnace #1 at USSK in early December due to soft market demand, high energy prices, and elevated imports. Blast furnace #1 has approximately 1.6 million net tons of annual raw steel equivalent capability.
- Blast Furnace #2 at USSK: Blast furnace #2 remains temporarily idled. As previously communicated, the Company pulled forward a planned outage on blast furnace #2 at USSK from October to September. Blast furnace #2 has approximately 1.7 million net tons of annual raw steel equivalent capability.
Stockholder Returns Update
The Company expects to complete an additional approximately $150 million of repurchases of common stock in the fourth quarter under its existing $500 million stock buyback authorization. By year end, the Company expects to have repurchased approximately 15% of its outstanding shares since the beginning of December 2021, which equates to over $1 billion returned directly to stockholders.
Fourth Quarter Adjusted EBITDA Commentary
The Flat-rolled segment’s adjusted EBITDA is expected to be lower than the third quarter. 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 market-based adjustable contracts. Continued customer de-stocking and seasonal demand factors are expected to result in lower shipments.
The Mini Mill segment’s adjusted EBITDA is expected to be negative in the fourth quarter. Significantly reduced average selling prices from the segment’s exposure to spot selling prices and the consumption of high-cost raw materials procured at the onset of the Ukraine conflict are expected to negatively impact the segment’s EBITDA performance and margins in the fourth quarter. Sourcing pig iron from Gary Works beginning in the first half of 2023 and working through the remainder of the high-priced raw materials are expected to improve the Mini Mill segment’s financial results.
The European segment’s adjusted EBITDA is also expected to be lower than the third quarter. Traditional year-end customer destocking has been slower than expected due to reduced demand from end customers. This has prolonged the soft steel demand at our Slovak operations and is negatively impacting steel selling prices in the region, notably in the segment’s spot exposure. High-cost raw materials, an extended supply chain, and elevated energy costs continue to pressure margin performance.
The Tubular segment is expected to deliver another quarter of incremental earnings compared to the third quarter. U.S. drilling rates remain steady which is supporting strong customer demand and prices for seamless OCTG. The segment continues to benefit from the strategic investment in the electric arc furnace completed in 2020 and our portfolio of proprietary connections. In addition, successful trade action on OCTG product has reduced unfairly traded imports. Our expected fourth quarter adjusted EBITDA includes the impact of a non-recurring, non-cash adjustment of approximately $20 million.
The full version of this release is available on: Media-Newsroom. - www.ussteel.com