United States Steel Corporation (NYSE:X) reported robust third-quarter 2023 earnings, marking its 12th consecutive quarter of profitability, and laid out its strategic plans for 2024. The company is currently reviewing multiple unsolicited proposals to maximize shareholder value. Despite its strong performance, U.S. Steel believes that its value creation has not been fully appreciated by the market.
Key takeaways from the call include:
- U.S. Steel reported net earnings of $299 million and adjusted net earnings of $350 million in Q3.
- The company generated positive free cash flow and ended the quarter with $5.5 billion in total liquidity.
- U.S. Steel's strategic projects are expected to generate EBITDA and cash flow in 2024.
- The company's buyback program is currently on hold.
- U.S. Steel plans to idle its blast furnace at Granite City Works temporarily to align melt capacity with demand.
During the earnings call, the company also highlighted its position to leverage global megatrends, including de-globalization, de-carbonization, and digitization. U.S. Steel discussed its upcoming projects, such as the completion of its electrical steel line and the startup of its dual galvanized coating line and Big River 2 mini mill in 2024.
The company's management confirmed the maintenance of its quarterly dividend. Despite the pause in its buyback program, U.S. Steel will assess capital returns as the business generates excess cash.
Regarding the fourth quarter, U.S. Steel expects lower EBITDA sequentially in the Flat-Rolled and Mini Mill segments, consistent performance in Europe, and lower EBITDA in Tubular operations. The company projects Q4 adjusted EBITDA between $200 million and $250 million.
U.S. Steel executives, including CEO David Burritt, expressed optimism about 2024, expecting similar results to 2023. The company also confirmed a $100 per ton price increase and noted positive momentum and increased order activity across its diverse end markets.
The company's management did not provide a specific timeline for increasing dividends or buybacks. However, they confirmed that they are running a robust strategic alternative process and will provide updates when appropriate. U.S. Steel thanked stockholders, customers, and employees for their support and commitment.
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