) logged a net loss of $50 million or 35 cents per share in the
fourth quarter of 2012, roughly 76% lower than a net loss of $211
million or $1.46 per share posted a year ago. Lower operating
costs (down nearly 10% year over year) aided the results.
Barring a favorable settlement associated with a supplier
contract dispute, net loss was 41 cents a share, lower than the
Zacks Consensus Estimate of a loss of 75 cents.
Revenues for the fourth quarter fell nearly 7% year over year
to $4,487 million, yet beat the Zacks Consensus Estimate of
$4,396 million. The largest U.S. steel maker (by volume) faced
continued economic challenges and pricing pressure in the
U.S. Steel, like other steel makers including
Steel Dynamics Inc.
), is contending with oversupply in the U.S. steel industry and
pricing pressure. Oversupply and increased steel imports into the
domestic market continues to put pressure on steel
For full-year 2012, the company recorded a net loss of $124
million or 86 cents a share, a more than two-fold year over year
surge from a loss of $53 million or 37 cents per share reported a
year ago. Net loss in 2012 included a loss of $353 million from
the sale of U.S. Steel Serbia.
Revenues for the full year fell roughly 3% year over year to
The Pennsylvania-based company's shares rose 1.85% in
The company's Flat-rolled segment raked in a profit of $11
million in the fourth quarter compared with a loss of $72 million
reported a year ago. However, profit fell 62% sequentially due to
a drop in average realized prices of steel and shipments. Average
realized price was $721/net ton in the quarter, down $20 per ton
on both sequential and year over year basis. The segment was
affected by high flat-rolled steel import levels.
U.S. Steel Europe (USSE) recorded a profit of $7 million in
the quarter, representing an improvement over last year's loss of
$89 million. However, profit slipped 74% sequentially due to
lower pricing. Average realized price declined 7% year over year
and 2% sequentially to $718 per net ton due to weaker spot market
U.S. Steel's Tubular segment's profit tumbled 73% year over
year to $32 million due to lower pricing and shipment. Average
realized price declined 5% year over year and 3% sequentially to
$1,624 per net ton. Increased import levels and lower drilling
activity by end users affected pricing and shipment in the
U.S. Steel ended 2012 with cash of $570 million, up nearly 40%
year over year. Long-term debt increased roughly 3% year over
year to $3,936 million.
Moving ahead, U.S. Steel expects its first-quarter 2013
results to be affected by sustained economic uncertainty. The
company expects near breakeven results for the Flat-rolled
segment in the first quarter and envisions higher shipment on a
sequential basis. Average spot prices are expected to improve
from the fourth quarter level while raw material costs have been
predicted to decline.
The USSE segment is expected to post better results
sequentially on the back of higher shipments. Average realized
prices are expected to decrease compared with the fourth
The company also expects the Tubular segment to post better
results in the first quarter sequentially on decreased costs and
higher shipments. Average realized prices are expected to be
modestly lower compared with the fourth quarter.
U.S. Steel currently carries a short-term Zacks Rank #3
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