US steel expects another net loss in Q3

US steel expects another net loss in Q3

US Steel today provided third quarter 2020 guidance, expecting third quarter 2020 adjusted EBITDA to be approximately a $100 million loss. The company expects third quarter 2020 adjusted diluted loss per share to be approximately $1.45.

“Improving market conditions experienced in June and July have accelerated through August and September. Strengthening steel fundamentals and our ability to respond quickly to increasing customer demand are expected to result in significantly improved adjusted EBITDA in the third quarter,” commented US Steel President and Chief Executive Officer David B. Burritt. “We have grown confident in the recovery that is underway in North America and Europe. While we believe this recovery is enduring, we remain relentlessly focused on what we can control, including management actions to stay nimble, reduce costs, and preserve cash.”

The company said it expects its flat rolled segment results to be negative in the third quarter, but significantly better than second quarter results. Order book and lead times have improved, and the company said it is increasingly confident in the sustained nature of market improvements.

“We responded to an improving order book by restarting three blast furnaces that were temporarily idled earlier this year in response to the impacts from COVID-19. We will continue to evaluate our order book and regularly assess our footprint to remain nimble to meet changes in customer demand. Based on today’s order activity, we expect two blast furnaces to remain temporarily idled through year-end,” the company said.

In tubular, market conditions appear to have bottomed, but catalysts for improvement are limited, the company said, adding that it is focused on what the company can control including the commissioning of its electric arc furnace by year-end. US Steel currently expects third quarter performance to be similar to the second quarter.

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