U.S. Steel Corporation (USS) is reporting a net income in the third quarter of $44 million or 28 cents per diluted share, compared to $101 million or 62 cents in the second quarter and $22 million or 15 cents in the year-ago period.

“Third-quarter operating results were positive for all three reportable segments in an economic environment that was more challenging than the second quarter,” USS Chair and CEO John Surma said in a statement released today. “Our tubular segment once again had solid results despite declining rig activity and pricing pressure caused by rising oil country tubular goods inventory and continued high levels of imports. Our flat-rolled and European segments were profitable but continued to be challenged by difficult global economic conditions. In addition, our flat-rolled segment continued to be adversely affected by increased import levels.”

Net income for the third quarter included an after-tax charge of $22 million or 13 cents per diluted share for employee lump-sum payments as provided by the new labor agreement, USS said. Net income for the second quarter included an after-tax charge of $11 million for an early redemption premium on the company’s $300 million 5.65 percent senior notes due in 2013. Net income for the year-ago period include $96 million of net foreign currency losses.

“Our results are expected to reflect continued weakness in the European and emerging market economies, as well as economic uncertainty in North America,” Surma said. “We expect total reportable segment and other businesses operating results to be around break-even for the fourth quarter with decreased results in all reportable segments.”

“We expect a loss for our flat-rolled segment due to slightly lower average realized prices, as well as lower shipments and higher operating costs,” USS said. “Average realized prices and shipments are expected to be lower compared to the third quarter as a result of cautious purchasing patterns early in the quarter created by the uncertain global economic outlook.”

“However, market conditions have recently been improving in North America, and we believe that we are already beyond the spot-price trough of the fourth quarter,” the company added. “New spot orders are being transacted at higher prices for delivery later this quarter. Operating costs are expected to increase due to scheduled blast furnace and other maintenance projects.”

•Flat-rolled reported an income from operations of 29 million, compared to $177 million in the second quarter and $203 million in the year-ago. Results declined “primarily due to a $31 per ton decrease in average realized prices, as significant price decreases for scrap and globally traded steelmaking materials placed downward pressure on spot and index-based pricing mechanisms in North American in the third quarter,” USS said. “The spot market continues to pressured by high import volumes, which for sheet products have increased 13 percent year over year through the first nine months of 2012. Proceeds from steel substrate sales to our tubular segment have also decreased. Shipments and operating costs for our flat-rolled segment were comparable to the second quarter.”

•U.S. Steel Europe (USSE) reported an income from operations of $27 million, compared to $34 million in the second quarter and a loss from operation of $50 million in the year-ago.

•Tubular reported an income from operations of $102 million, compared to $103 million in the second quarter and $134 in the year-ago.

•Other businesses reported an income from operations of $13 million, compared to $16 million in the second quarter and $8 million in the year-ago.

•Total income from operations was $62 million, compared to $253 million in the second quarter and $199 million in the year-ago.

•The average realized price per net ton of flat-rolled was $741, compared to $772 in the second quarter and $773 in the year-ago.

•USS and USSE shipped a total of 5.34 million ton, compared to 5.434 in the second quarter and 5.512 in the year-ago.

•Flat-rolled raw-steel capability was 77 percent, compared to 77 percent in the second quarter and 74 percent in the year-ago.

•USS reported net sales of $4.652 billion, compared to $5.017 billion in the second quarter and $5.081 billion in the year-ago.

•Flat-rolled capital expenditures were $89 million, compared to $151 million in the second quarter and $160 million in the year-ago.

•On Sept. 30, USS had $536 million in cash and $2.4 billion of total liquidity, compared to $565 million in cash and $2.4 billion of total liquidity on June 30.

Posted 10/30/2012