U.S. Steel Plunged to First Quarterly Loss Since Imposition of Tariffs

SEATTLE (Scrap Monster): Pittsburgh-based United States Steel Corporation (U.S. Steel) reported net loss of $84 million or $0.49 per diluted share in the third quarter of 2019. This is the first loss reported by the company since the introduction of tariffs by Trump administration to help the country’s domestic steel sector. This compares to net earnings of $291 million or $1.62 per diluted share during the corresponding quarter in 2018.

The adjusted net loss was $35 million or $0.21 per share. U.S. Steel had reported adjusted net earnings of $321 million or $1.79 per diluted share in third quarter 2018.

Commenting on the result, David B. Burritt, President and Chief Executive Officer, U.S. Steel noted that the company posted better-than-expected results, aided by solid cost performance and increased flat-rolled shipments. The company completed three major financing activities since the end of the quarter, delivering $1.1 billion of incremental capital. U.S. Steel will focus on further reducing fixed costs and investing in revitalizing its assets, Burritt added.

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The company set capital spending budget for 2020 at $950 million, significantly below the analysts’ expectations of $1.65 billion. It also declared a dividend of $0.05 per share, payable on December 10, 2019.

The peer steelmakers in the U.S., including Nucor, AK Steel and Steel Dynamics had managed to report operating profits in Q3 this year, but the earnings of these companies too have recorded sharp decline over the previous year.