United States Steel Corporation Provides Third Quarter 2020 Guidance

United States Steel Corporation (NYSE: X) today provided third quarter 2020 guidance. Third quarter 2020 adjusted EBITDA is expected to be approximately ($100) million. The Company expects third quarter 2020 adjusted diluted loss per share to be approximately ($1.45).

“Improving market conditions experienced in June and July have accelerated through August and September. Strengthening steel fundamentals and our ability to respond quickly to increasing customer demand are expected to result in significantly improved adjusted EBITDA in the third quarter,” commented U. S. Steel President and Chief Executive Officer David B. Burritt. “We have grown confident in the recovery that is underway in North America and Europe. While we believe this recovery is enduring, we remain relentlessly focused on what we can control, including management actions to stay nimble, reduce costs, and preserve cash.”

Burritt continued, “Our successful capital market activities in the second quarter, combined with our optimism in a continued recovery, gives us the confidence to repay a portion of our U.S. ABL borrowing in September. By the end of the quarter, we plan to repay approximately $900 million of our U.S. ABL, which will place our U.S. ABL borrowings below pre-COVID-19 levels. We continue to proactively review our use of the U.S. ABL as a reliable and low-cost source of capital.”

“Our priorities remain unchanged even as market conditions improve,” concluded Burritt. “Protecting lives and livelihoods continues to be our top priority, guided by our S.T.E.E.L. Principles. We also remain focused on fortifying the balance sheet as we navigate today’s market and better position the company to invest in the recovery. This includes our intent to acquire the remaining stake in Big River Steel, our top strategic priority in pursuit of our world-competitive, ‘best of both’ integrated and mini mill strategy.”

Adjusted EBITDA Commentary

We are encouraged by the pace of market improvement and while we expect our Flat-rolled segment results to be negative in the third quarter, we expect them to be significantly better than second quarter results. Our order book and lead times have improved, and we are increasingly confident in the sustained nature of market improvements. We responded to an improving order book by restarting three blast furnaces that were temporarily idled earlier this year in response to the impacts from COVID-19. We will continue to evaluate our order book and regularly assess our footprint to remain nimble to meet changes in customer demand. Based on today’s order activity, we expect two blast furnaces to remain temporarily idled through year-end.