United States Steel Corporation (NYSE: X) today provided fourth
quarter 2021 guidance. Fourth quarter 2021 adjusted EBITDA is
expected to be approximately $1.65 billion.
“Our business continues to operate at record safety, quality,
and reliability levels,” commented U. S. Steel President and Chief
Executive Officer David B. Burritt. “We are ending 2021 from a
position of strength and expect continued strong performance in
2022 and beyond. This year, we’ve transformed the balance sheet,
enhanced direct returns to stockholders, and are on a path to get
to our Best for All℠ future faster. Next year, our fixed price
contracts are resetting significantly higher, providing better
earnings stability compared with competitors with more spot
exposure. Additionally, incremental demand drivers are
materializing, and we believe the steel industry super cycle will
continue. Our fourth quarter guidance indicates another quarter of
strong performance yet reflects a temporary slowdown in order entry
activity, which we believe is related to typical seasonal year-end
buying activity.”
Burritt concluded, “We are bullish for next year and remain
agile to ensure we continue to meet our customers’ needs as we
enter the new year. 2022 should be another great year for U. S.
Steel with robust free cash flow, continued ample liquidity to fund
strategic investments, and additional opportunities to enhance our
capital allocation priorities. U. S. Steel’s future is bright, and
I can confidently say our best days are ahead.”
Stockholder Returns Update
Quarter to date, the Company has repurchased approximately $100
million of common stock. As of December 16, 2021, there is
approximately $200 million remaining under the Company’s $300
million stock buyback authorization.
Deleveraging Update
The Company has completed over $400 million of deleveraging
targeted for the fourth quarter and expects to end the year with
approximately $3.9 billion of debt, with approximately 80% of its
remaining debt due in 2029 and beyond. The balance sheet is
transformed and well positioned to support Best for All strategic
investments. The Company will continue to evaluate opportunities
for future deleveraging as debt becomes callable.
Adjusted EBITDA Commentary
The Flat-rolled segment is expected to deliver adjusted EBITDA
approaching $1 billion in the fourth quarter and EBITDA margins
near the third quarter record. The strong performance is driven by
increased flow-through of higher steel selling prices offset by
cautious seasonal buying and higher raw material and energy costs.
The segment’s assets continue to perform exceptionally well
allowing the Company to enter next year from a position of
strength.
The Mini Mill segment is expected to continue delivering EBITDA
margins similar to third quarter’s record performance despite lower
volumes, reflecting the high-quality earnings of the Mini Mill
segment. Lower volumes were a result of cautious seasonal buying
partially offset by lower metallics usage.
The European segment is expected to deliver lower EBITDA
compared to third quarter’s record performance. Lower steel prices,
unfavorable foreign exchange rate impacts, and higher planned
outage and energy costs were only partially offset by reduced iron
ore costs. The 60-day planned outage on #1 blast furnace began on
November 29 and is expected to continue into January 2022.
The Tubular segment is expected to deliver improved EBITDA
performance compared with the third quarter. Higher steel selling
prices are expected to more than offset higher scrap costs. We
expect the Tubular segment to become a more meaningful contributor
to EBITDA in 2022.
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 are unable to present a quantitative reconciliation of our
forward-looking Adjusted EBITDA guidance to the most directly
comparable GAAP financial measure because management cannot
reliably predict the tax provision.
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, financial
performance, the construction or operation of new and existing
facilities, 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, 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/20211216006046/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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