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US Steel posts net loss for full year 2012

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By KEVIN NEVERS

U.S. Steel Corporation (USS) is reporting a net loss in 2012 of $124 million or 86 cents per diluted share, compared to a net loss in 2011 of $53 million or 37 cents.

USS posted a net loss in the fourth quarter of 2012 of $50 million or 35 cents per diluted share, compared to a net income in the third quarter of $44 million or 28 cents and a net loss in the year-ago of $211 million or $1.46.

The full-year net loss of $124 million include a net loss of $353 million primarily due to the sale of U.S. Steel Serbia.

The fourth-quarter net loss of $50 million included a $9 million favorable settlement related to a supplier contract dispute.

“For the third consecutive quarter all three of our reportable segments had positive operating results despite the uncertain global economic environment,” USS Chair and CEO John Surma said in a statement released today. “Lower drilling and project pipe line activity, as well as continued high import levels, significantly reduced our tubular segment’s results. For our flat-rolled segment, our profitability was negatively impacted by the uncertain domestic fiscal situation as well as continued high levels of flat-rolled steel imports.”

Outlook

“We continue to be challenged by uncertain global economic and steel market conditions,” Surma said. “We expect a slight improvement in the European and tubular segment operating results with flat-rolled segment results expected to be near break-even. Total reportable segment and other business operating results are expected to be comparable to the fourth quarter.”

“We expect flat-rolled segment results to be near break-even in the first quarter,” USS said. “Steel buyers in North America continued to exhibit caution early in the year but recent increases in our daily order rates suggest increased spot market demand as the quarter progresses. We expect higher shipments in the first quarter than the fourth quarter with increases across many of our industry segments.”

“Average spot prices (in flat-rolled) are expect to be higher than the fourth quarter as recently announced price increases take effect,” USS added. “Lower prices for market-based contracts, which tend to lag the spot market, are expected to offset the higher spot market prices with overall first quarter average realized prices for the flat-rolled segment being comparable to the fourth quarter. Raw materials costs are expected to decrease slightly as lower coal prices are partially offset by higher scrap prices. Total operating costs are expected to be slightly higher compared to the fourth quarter.”

2012/4Q Income from Operations

•Flat-rolled reported an income from operations in 2012 of $400 million, compared to $469 million in 2011. In the fourth quarter it reported an income from operations of $11 million, compared to an income of $29 million in the third quarter and a loss of $72 million in the year-ago.

•U.S. Steel Europe (USSE) reported an income from operations in 2012 of $34 million, compared to a loss from operations in 2011 of $162. In the fourth quarter it reported an income from operations of $7 million, compared to an income of $27 million in the third quarter and a loss of $89 million in the year-ago.

•Tubular reported an income from operations in 2012 of $366 million, compared to an income of $316 million in 2011. In the fourth quarter it reported an income from operations of $32 million, compared to an income of $102 million in the third quarter and an income of $119 million in the year-ago.

•Other businesses reported an income from operations in 2012 of $55 million, compared to an income of $46 million in the year-ago. In the fourth quarter it reported an income of $9 million, compared to an income of $13 million in the third quarter and an income of $16 million in the year-ago.

•Total income from operations in 2012 was $247, compared to an income of $265 million in 2011. In the fourth quarter total income from operations was $5 million, compared to $62 million in the third quarter and a total loss from operations of $143 million in the year-ago.

More 2012/4Q Numbers

•The average realized price per net ton of flat-rolled in 2012 was $750 ($759 in 2011). In the fourth quarter, $721 ($741 3Q, $471 year-ago).

•USS and USSE shipped 21.676 million net tons in 2012 (22.533 million in 2011). In the fourth quarter, 5.236 million net tons (5.34 million 3Q, 5.419 million year-ago).

•Flat-rolled raw steel capability was 78 percent in 2012 (77 percent 2011). In the fourth quarter, 77 percent (77 percent 3Q, 75 percent year-ago).

•USS reported net sales of $19.328 billion in 2012 ($19.884 billion in 2011). In the fourth quarter, $4.487 billion ($4.652 billion 3Q, $4.819 billion year-ago).

•Flat-rolled capital expenditures were $625 million in 2012 ($616 million in 2011). In the fourth quarter, $141 million ($89 million 3Q, $189 million year-ago).

•On Dec. 31, 2012, USS had $570 million in cash and $2.4 billion in total liquidity, compared to $408 million in cash and $1.8 billion in total liquidity on Dec. 31, 2011.

 

Posted 1/29/2013