PITTSBURGH - United States Steel Corporation (NYSE: NYSE:X) today provided an updated guidance for the second quarter of 2024, projecting adjusted net earnings per diluted share to be in the range of $0.76 to $0.80 and adjusted EBITDA to be approximately $425 million, which is at the lower end of its previous forecast.
The company's President and CEO, David B. Burritt, attributed the revised EBITDA guidance to stable domestic flat-rolled steel demand and dynamic spot steel pricing. Despite challenging conditions in the Tubular segment, Burritt highlighted the recent restart of a temporarily idled blast furnace in Europe due to improved customer demand.
United States Steel Corporation also announced the commencement of operations for the Big River Steel dual Galvalume® / Galvanized coating line during the second quarter and is progressing towards the start-up of Big River 2 mini mill in the latter half of 2024. The company expects these developments to enhance its ability to meet the growing demand for sustainable steels across various end-markets.
Burritt further noted that the company has achieved significant milestones in its transaction with Nippon Steel Corporation, including shareholder approval and the receipt of all non-U.S. regulatory approvals. The focus now is on obtaining the remaining U.S. regulatory approvals to close the deal, which is expected to bring advanced technologies to U.S. Steel and bolster the domestic steel industry.
In terms of segment performance, the Flat-Rolled segment's adjusted EBITDA is expected to surpass the first quarter, while the Mini Mill segment anticipates a decline in adjusted EBITDA due to lower average selling prices. The European segment's adjusted EBITDA is also expected to drop compared to the first quarter due to lower volumes, and the Tubular segment is facing financial performance challenges from decreased selling prices.
The press release includes reconciliations of non-GAAP financial measures, such as adjusted net earnings and EBITDA, which the company believes are useful in understanding its operating performance. However, these measures should not be considered as substitutes for financial measures prepared in accordance with U.S. GAAP.
This financial outlook is based on a press release statement and contains forward-looking statements subject to risks and uncertainties. For more detailed information on the company and its performance, please refer to United States Steel Corporation's filings with the SEC.
In other recent news, United States Steel Corporation and Nippon Steel Corporation have obtained all necessary international approvals for their proposed transaction. This development was met with enthusiasm by both companies, who emphasize the deal's potential for enhancing U.S. steelmaking capabilities and fostering stronger industry competition. The transaction has already received overwhelming support from U.S. Steel's shareholders, with 99% approval from votes cast at a recent meeting.
In response to a misinformation campaign, U.S. Steel's Board issued a statement clarifying details about the all-cash transaction with Nippon Steel. The board underscored the transaction's benefits, including value for investors, job security, growth opportunities for employees, and competitive advantages for the American steel industry.
On the analyst front, Jefferies initiated coverage on US Steel stock with a Buy rating, noting the company's growth potential, particularly from its Big River 2 project. Meanwhile, Morgan Stanley upgraded US Steel stock to Overweight, citing the potential value generation from the company's transformational investments.
Lastly, U.S. Steel has declared a dividend for its stockholders, setting the dividend at 5 cents per share. The company continues to implement its Best for All® strategy, focusing on customer-centric practices and sustainable operations.
InvestingPro Insights
As United States Steel Corporation (NYSE: X) navigates through the challenges of the steel industry, investors may find it helpful to consider some key financial metrics and insights. According to InvestingPro data, the company holds a market capitalization of $8.2 billion and has a trailing twelve-month P/E ratio of 8.14, which is lower than the industry average, suggesting that the stock might be undervalued.
On the performance front, United States Steel Corporation has demonstrated a strong return over the last year with a 56.67% price total return, outpacing many of its competitors. This performance is particularly noteworthy as it comes amidst a period of revenue contraction, with a -12.6% change in revenue over the last twelve months as of Q1 2024.
One of the InvestingPro Tips highlights that the company has maintained dividend payments for 34 consecutive years, a testament to its commitment to shareholder returns despite market fluctuations. Moreover, the company’s management has been aggressively buying back shares, which could be a sign of confidence in the company's future and a potential catalyst for stock price appreciation.
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With the company's next earnings date scheduled for July 25, 2024, stakeholders will be keenly observing how the strategic initiatives, such as the Big River Steel project, will impact the company's bottom line and whether the recent operational developments will translate into sustained financial performance.
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