United States Steel Corporation (NYSE: X) today provided third
quarter 2021 guidance. Third quarter 2021 adjusted EBITDA is
expected to be approximately $2.0 billion. This compares to second
quarter 2021 adjusted EBITDA of approximately $1.3 billion.
“We expect the third quarter to be a quarter of records for U.
S. Steel. Supported by strong reliability and quality performance,
sustained customer demand, and continued increases in steel selling
prices, we expect our Best for All℠ business model to generate
record quarterly adjusted EBITDA and EBITDA margins, demonstrating
the power of our strategy,” commented U. S. Steel President and
Chief Executive Officer David B. Burritt. “We remain bullish that
market fundamentals will support a stronger for longer steel market
and we’ve accelerated the pace of deleveraging to clear the path to
transitioning to our Best for All future faster. Our best days are
ahead.”
Deleveraging Update
The Company also provided an update on deleveraging activity for
the year. Year to date, the Company has reduced its debt by
approximately $2.7 billion, excluding the impact of the debt
assumed in connection with the Big River Steel acquisition.
In June, the Company announced the redemption of $718 million
aggregate principal amount of its outstanding 6.875% Senior Notes
due 2025, which was completed in August. In July, the Company
announced an incremental target of up to $1 billion of additional
deleveraging by mid-2022. The Company plans to complete
approximately half of this incremental deleveraging target by
month-end by completing the following actions:
- redeeming $180 million of the 6.625% Big River Steel Senior
Secured Notes due 2029; and
- redeeming $370 million of the 6.25% U. S. Steel Senior Notes
due 2026.
Year to date deleveraging actions have reduced the Company’s
annual run-rate interest expense by approximately $185 million and
extended its maturity profile. The Company will continue to
evaluate opportunities to accelerate the pace of deleveraging
through the remainder of the year. Based on the Company’s
significant deleveraging progress and accelerating EBITDA
generation over the past 12 months, the ratio of net debt to
adjusted EBITDA is projected to be approximately 0.6 times at
quarter end.
Adjusted EBITDA Commentary
The Flat-rolled segment is expected to deliver record EBITDA and
EBITDA margin in the third quarter driven by the increased
flow-through of higher steel selling prices into our adjusted
contracts and spot selling prices and continued strong customer
demand. The segment’s assets continue to perform exceptionally
well, creating efficiencies across the segment and increasing
segment profitability.
The Mini Mill segment continues to set records as well. Third
quarter EBITDA and EBITDA margin are expected to surpass last
quarter’s records reflecting higher steel selling prices and
continued operating efficiencies.
The European segment also is expected to deliver record EBITDA
and EBITDA margin. Steel demand remains strong. Higher steel prices
continue to flow-through the segment’s average selling prices. This
benefit is only partially offset by higher raw material costs,
particularly for iron ore.
The Tubular segment is expected to continue its upward
trajectory. The benefit of higher prices and increased volumes are
partially offset by higher scrap input costs.
Note Regarding Non-GAAP Financial Measures
Adjusted earnings before interest, income taxes, depreciation
and amortization (Adjusted EBITDA) is a non-GAAP measure that
excludes certain charges that are not part of the Company's core
operations. We present Adjusted EBITDA to enhance the understanding
of our ongoing operating performance and established trends
affecting our core operations, by excluding certain charges that
can obscure underlying trends. U. S. Steel’s management considers
Adjusted EBITDA as an alternative measure of operating performance
and not an alternative measure of the Company’s liquidity. U. S.
Steel’s management considers 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 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 EBITDA
should not be considered a substitute for net earnings 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.
We do not provide a reconciliation of our forward-looking
Adjusted EBITDA guidance, which is presented on a non-GAAP basis,
to the most directly comparable GAAP financial measure since the
combined impact and timing of certain potential charges or gains on
the tax provision is inherently uncertain and outside of our
control. Accordingly, we cannot provide a reconciliation without
unreasonable effort and are unable to determine the probable
significance of the unavailable information.
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,” "may" and similar expressions or by using future dates in
connection with any discussion of, among other things, future
profitability and earnings, 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, anticipated disruptions
to our operations and industry due to the COVID-19 pandemic,
changes in global supply and demand conditions and prices for our
products, the integration of Big River Steel in our existing
business, business strategies related to the combined business, 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. The 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 the 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, 2020, 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.
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 26.2 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/20210916005865/en/
John O. Ambler Vice President Corporate Communications T – (412)
433-2407 E – joambler@uss.com
Kevin Lewis Vice President Investor Relations T – (412) 433-6935
E – klewis@uss.com
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