US Steel reports better-than-forecasted results for North American Flat-Rolled segment in Q2

United States Steel Corp., headquartered in Pittsburgh, has reported second-quarter 2024 net earnings of $183 million, or 72 cents per diluted share, and adjusted net earnings of $211 million, or 84 cents per diluted share.

These numbers mark a decline of nearly 62 percent and 56 percent, respectively, from the company’s second-quarter 2023 net earnings of $477 million, or $1.89 per diluted share, and adjusted net earnings of $483 million, or $1.92 per diluted share.

Despite the year-over-year decline in net earnings and adjusted net earnings, CEO David B. Burritt says adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $443 million improved sequentially despite growing pricing headwinds across all of U.S. Steel’s operating segments.

“Most notable was better-than-forecasted results in our North American Flat-Rolled segment in large part from enhanced product mix and cost management that kept earnings resilient in a dynamic market,” he adds. “Our Mini Mill segment performed well, delivering 17 percent EBITDA margin when adjusting for $30 million in one-time startup costs for strategic projects.”

He says the company’s Tubular and U.S. Steel Europe performed as expected in the recently completed quarter, with EBITDA of $42 million and $21 million, respectively.

“We expect third-quarter adjusted EBITDA in the range of $275 million and $325 million, as recent pricing dynamics continue to impact our business,” Burritt says. “Our North American Flat-Rolled segment results should soften slightly as lower spot prices more than offset continuing strength in our contract order book and lower spending.

"Our Mini Mill segment results will likely reflect lower spot prices and $30 million of related startup and one-time construction costs ahead of a planned fourth-quarter startup of Big River 2 (BR2). In Europe, results are expected to be consistent with the second quarter, reflecting lower selling prices largely offset by lower raw material costs. Our Tubular segment results should be lower as selling prices decline in the third quarter.”

Regarding U.S. Steel’s transaction with Japan-based Nippon Steel Corp. (NSC), which has met with opposition from several members of Congress, President Joe Biden and Republican presidential candidate Donald Trump, Burritt says, “We continue to make progress on the U.S. regulatory processes ahead of the anticipated closing of our transaction with Nippon Steel Corp. later this year, which will bring advanced technologies to U. S. Steel to support a stronger domestic steel industry with enhanced competition and will strengthen national, economic and job security.”

In the company’s earnings presentation, U.S. Steel notes NSC has committed to investing an additional $1.4 billion in capital expenditures into facilities covered by the current basic labor agreement (BLA) with the United Steelworkers (USW), above and beyond what is required in the BLA, and to moving NSC’s existing U.S. headquarters from Houston to Pittsburgh. The company also says the merger will enable advancement of NSC’s technologies to decarbonize steel production, which include hydrogen injection in blast furnaces, hydrogen use in direct-reduced iron and high-grade steel production through large electric arc furnaces.

Of U.S. Steel’s other strategic investments, Burritt says, construction on BR2 is achieving key milestones, with a fourth-quarter startup targeted. “Also at Big River, the recently commissioned dual galvalume/galvanized coating line is ramping as expected. Galvanized coils are being delivered to customers, and the team is on track to produce galvalume coils later this summer.”

More details on the company’s quarterly financial data can be found here.