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PITTSBURGH - United States Steel Corporation (NYSE: NYSE:X) today announced its third-quarter 2024 financial guidance, projecting adjusted EBITDA to be around $300 million with adjusted net earnings per diluted share between $0.44 and $0.48. The figures align with previous third-quarter expectations, indicating resilient domestic flat-rolled steel demand despite a challenging pricing environment.
President and CEO David B. Burritt highlighted the company's diverse North American order books and strategic initiatives, including the start-up of Big River 2 mini mill in the fourth quarter, which is expected to incur approximately $40 million in related costs within the third quarter. These costs are accounted for in the adjusted EBITDA guidance. Additionally, U.S. Steel is progressing with its electrical steel line and a new coating line, part of a $4 billion capital investment strategy aiming to meet sustainable steel demand and enhance stakeholder value.
Despite a softening demand in Europe, which has kept Blast Furnace #1 idled beyond a planned outage, U.S. Steel's European segment is expected to show improved adjusted EBITDA from the second quarter, aided by a favorable adjustment for CO2 allowances. The company's Flat-Rolled and Tubular segments, however, are anticipated to experience lower adjusted EBITDA compared to the previous quarter, mainly due to softer selling prices and a weak pricing environment, respectively.
U.S. Steel also addressed its ongoing U.S. regulatory review process for a pending transaction with Nippon Steel, expressing confidence in obtaining necessary approvals and closing the deal by year-end. Nippon Steel's recent disclosure included governance structures post-transaction and additional investment commitments for U.S. Steel facilities, which the company believes will benefit employees and communities.
The provided financial measures, such as adjusted net earnings and adjusted EBITDA, are non-GAAP metrics that U.S. Steel uses to offer additional insights into its operating performance. These measures exclude certain costs not indicative of core operations and are presented to help investors compare U.S. Steel's performance with that of other companies.
This financial guidance is based on a press release statement from United States Steel Corporation, a leading steel producer serving various industries with innovative steel products and maintaining significant iron ore production. The company continues to focus on safety and sustainable practices while advancing its Best for All® strategy.
In other recent news, U.S. Steel's Q2 earnings are projected to be at the lower end of its outlook, with adjusted net earnings per diluted share estimated to be in the range of $0.76 to $0.80 and adjusted EBITDA expected to be approximately $425 million. GLJ Research has upgraded its rating for shares of U.S. Steel to Buy, based on a Sum-of-the-Parts analysis, indicating potential growth for the steel manufacturer. The company's new venture, Big River 2, is expected to nearly double the revenue of U.S. Steel's Mini Mill segment by 2025, according to Wall Street estimates.
Recent developments include U.S. Steel, along with the United Steelworkers union and Wheeling-Nippon, filing trade petitions against imports of corrosion-resistant steel from multiple countries. Other analyst firms have also adjusted their ratings on U.S. Steel, with JPMorgan upgrading the stock from Neutral to Overweight and Jefferies maintaining a Buy rating on the company.
U.S. Steel has warned of potential job losses and the closure of several steel mills if its planned merger with Nippon Steel does not proceed. However, the company's employees have rallied in support of the merger, emphasizing its importance for the future of the company's operations and workforce. Lastly, U.S. Steel has updated its Code of Ethical Business Conduct, incorporating guidelines for generative artificial intelligence applications.
InvestingPro Insights
As United States Steel Corporation (NYSE: X) navigates through a challenging market, InvestingPro data sheds light on the company's current financial health and future prospects. With a market capitalization of $8.27 billion, U.S. Steel's valuation reflects investor confidence in the company's strategic initiatives and long-term growth potential. The stock's price-to-earnings (P/E) ratio stands at 14.51, suggesting that shares are trading at a reasonable price relative to the company's earnings.
The company's gross profit margin over the last twelve months as of Q2 2024 is reported at 11.42%, which, according to an InvestingPro Tip, indicates that U.S. Steel suffers from weak gross profit margins compared to industry peers. This could be a point of concern for investors looking at the company's ability to turn revenue into profit. However, in a sign of stability, U.S. Steel has maintained dividend payments for 34 consecutive years, a testament to its commitment to delivering shareholder value even in turbulent times.
Investors should note that U.S. Steel's stock price movements have been quite volatile, with a 1-month price total return of -6.41% but a positive 1-year price total return of 16.76%. This volatility is a critical factor for those considering an investment in the steel industry, where prices can be sensitive to both market and geopolitical events.
For those seeking more in-depth analysis, InvestingPro offers additional tips on U.S. Steel, which can be accessed at https://www.investing.com/pro/X. These tips provide valuable insights into the company's performance and future outlook, allowing investors to make informed decisions based on the latest data and expert analysis.
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