U.S. Steel Stares at Larger-Than-Expected Second Quarter Loss

SEATTLE (Scrap Monster): The Pittsburgh-based U.S. Steel estimated wider-than-expected loss during the second quarter of the year. This is on account of the fact that the company had to idle significant portion of its steelmaking operations, following the Covid-19 pandemic outbreak.

The company anticipates adjusted loss per share of $3.06, as compared with analysts’ estimate of loss per share of $1.73. Also, it expects loss before interest, taxes, depreciation and amortization of $315 million, excluding estimated charges of nearly $100 million. The company is expected to report Q2 results in end-July.

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David Burritt, Chief Executive Officer noted that the second quarter is likely to be significantly impacted by the effects of the pandemic. The idling of facilities is likely to generate non-recurring costs. However, Q2 would be the bottom of its business, with demand already witnessing strong rebound in early-June, Burritt added.

Meantime, the company has decided to focus on advancing its ‘best of both’ strategy. It plans to explore strategic options for potential sale of its UPI business. It aims to achieve annual fixed cost reduction of $200 million ahead of its 2022 deadline. The company had recently announced common stock offering of 50 million shares, the proceeds of which would be also used to strengthen its balance sheet.