U.S. Steel (X) guides Q2 EPS above consensus
United States Steel Corporation (X) today provided second quarter 2023 adjusted net earnings per diluted share guidance of $1.81 to $1.86, which is above the consensus of $1.76. Second quarter 2023 adjusted EBITDA is expected to be approximately $775 million.
Commenting on second quarter guidance, President and Chief Executive Officer David B. Burritt said, “We expect to deliver another strong quarter of safety, operational and financial performance driven by our continued focus on strategic markets and building a more resilient business model. Adjusted EBITDA guidance of $775 million reflects the benefits of our diverse order book, the realization of higher selling prices and management actions that continue to improve operational metrics and cost performance throughout our segments. Our expected second quarter performance supports a forecasted quarter-ending cash position of approximately $3 billion and $75 million of share repurchases in the quarter.”
Burritt concluded, “We continue to execute our strategy from a position of strength as our Best for All® strategic investments remain on-time and on-budget. Our next critical strategic milestone is the start-up of the non-grain oriented (NGO) electrical steel line at Big River Steel in the third quarter of this year. Once on-line, the NGO electrical steel line is expected to strengthen domestic supply chains and bring advanced manufacturing back to our shores as we serve our automotive customers with state-of-the-art electrical steel that is sustainable and exclusive to U. S. Steel.”
Stockholder Returns Update
The Company expects to complete approximately $75 million of repurchases of common stock in the second quarter under its existing $500 million stock buyback authorization. By quarter end, the Company expects to have repurchased approximately 17% of its diluted shares outstanding since the beginning of December 2021, which equates to over $1.1 billion returned directly to stockholders.
Second Quarter Adjusted EBITDA Commentary
The Flat-Rolled segment’s adjusted EBITDA is expected to be higher than the first quarter. The segment’s diverse end-market exposure and growth in strategic markets has helped to balance the order book despite shifting market dynamics throughout the quarter. Also, increased realization of higher steel prices in the segment’s average selling price and the absence of first quarter seasonal mining operation headwinds are expected to meaningfully contribute to higher sequential EBITDA.
The Mini Mill segment’s adjusted EBITDA is expected to be higher than the first quarter. The segment is expected to benefit from higher average selling prices as strong steel prices from the first half of the year are increasingly reflected in the segment’s results.
The European segment is expected to return to positive adjusted EBITDA. The realization of commercial tailwinds in the second quarter, lower energy costs and increased efficiencies from running all three blast furnaces should each contribute to higher sequential adjusted EBITDA.
The Tubular segment’s adjusted EBITDA is expected to remain strong but lower than the first quarter. Lower spot average selling prices and continued high import levels are moderating the segment’s performance after 10 consecutive quarters of increased EBITDA. Our value-added product mix, exposure to more resilient basins and cost-effective electric arc furnace in Fairfield, Alabama continue to support strong results in the the Company’s control.
This story originally appeared on Investing
