Steel Mills

US Steel Reports $1.79 Billion Loss from Impairment Charge

October 30, 2013

US Steel reported a net loss of $1.79 billion for the third quarter due primarily to a non-cash goodwill impairment charge of $1.8 billion. Net loss for the quarter excluding the impairment charge totaled $20 million, compared to a net loss of$78 million the previous quarter, and profit of $44 million in Q3 2012.

The company shipped 4.7 million tons of steel for net sales of $4.1 billion.

Commenting on results, U. S. Steel CEO Mario Longhi said, “Total reportable segment and other businesses operating results of $113 million reflect a meaningful improvement in our Flat-rolled segment operating results partially offset by an outage in our European segment.”

The flat rolled segment reported income of $82 million compared to a loss of $51 million in the previous quarter. The increase was attributed to higher average prices and lower maintenance costs that were partially offset by reduced shipments. A planned blast furnace outage at Great Lakes Works and the shutdown at Lake Erie Works impacted shipments for the quarter.

US Steel’s European segment posted a $32 million loss where a scheduled blast furnace resulted in significantly lower shipments and higher repair and maintenance costs.

The tubular segment improved slightly to $49 million from $45 million the previous quarter but was down from $102 million reported in Q3 2012.

“We expect total reportable segment and Other Businesses income from operations to decrease compared to the third quarter due primarily to planned maintenance outages in our Flat-rolled segment,” said Longhi in his outlook for the fourth quarter. “Results for our European segment are projected to improve compared to the third quarter and Tubular results are expected to be comparable to the third quarter.”

The flat rolled segment is expected to breakeven in the fourth quarter due to $60 million of repair costs anticipated for the relining of a blast furnace at Gary Works and blast furnace maintenance at Fairfield works. Prices are expected to compare with third quarter and shipments to increase slightly.