US Steel reported Tuesday a second quarter 2016 net loss of $46 million, compared to a second quarter 2015 net loss of $261 million and a first quarter 2016 net loss of $340 million.
Second quarter results for the Flat-Rolled segment improved from the first quarter as steel prices increased throughout the quarter. The increase in average realized price reflects the flow through of higher index prices to monthly contracts and increased pricing on spot business.
Second quarter results for the Tubular segment decreased compared to the first quarter primarily due to lower shipments and prices. Shipments were adversely impacted as average rig counts were lower in the second quarter.
Commenting on the company’s outlook for 2016, US Steel President and Chief Executive Officer Mario Longhi said, “The steel industry continues to face challenging conditions as a result of global overcapacity and unfair trade practices. We remain focused on improving our trade laws and their enforcement, and we are encouraged that final affirmative determinations in recent trade cases have been a catalyst for increasing steel prices."
If market conditions, which include spot prices, customer demand, import volumes, supply chain inventories, rig counts, and energy prices, remain at their current levels, the company expects:
• 2016 net earnings to be approximately $50 million, or $0.34 per share, and adjusted EBITDA to be approximately $850 million.
• Results for the Flat-Rolled and European segments should each be higher than their 2015 results and results for the Tubular segment should be lower than their 2015 results.
• To be cash positive for the year, including approximately $400 million of cash benefits from working capital improvements in 2016, primarily related to better inventory management, driven by improved sales and operations planning practices, helping to offset growing accounts receivables balances.