U.S. Steel Cuts Annual View, Posts Third-Quarter Profit

U.S. Steel Corp. lowered its full-year guidance as it continues to recover from unplanned outages in the third quarter and invest in additional maintenance spending.

Under current market conditions, the steelmaker expects a 2016 loss of about $355 million, or $2.26 a share. In July, the company had projected annual earnings of about 34 cents a share.

U.S. Steel said operational issues remain a headwind. In addition, the company said it has identified assets that require more investment and increased maintenance spending. U.S. Steel said it would use its cash to expedite "the revitalization of our facilities and to fund additional growth projects."

For the year, U.S. Steel expects about $475 million in adjusted earnings before interest, taxes, depreciation and amortization, compared with July guidance of about $850 million.

In after-hours trading, U.S. Steel shares fell 7% to $17.40.

Meanwhile, for the third quarter, U.S. Steel posted a profit but faced "some operational challenges that limited our ability to realize the full benefits of an improved pricing environment."

The company earned $51 million, or 32 cents a share, compared with a loss of $173 million, or $1.18 a share, a year earlier. Sales fell 5.1% to $2.69 billion.

Earnings excluding items were 40 cents a share. Analysts polled by Thomson Reuters projected earnings excluding items of 80 cents a share on revenue of $2.82 billion.

U.S. Steel said its flat-rolled segment showed improvement in spot and contract prices, while prices also improved at its European business. At its tubular segment, results were better than the second quarter but reflected the challenges of low utilization rates.

U.S. Steel also announced an agreement with the expected buyer of U.S. Steel Canada, which filed for bankruptcy protection in September 2014.

If the agreement with Bedrock Industries Group LLC receives court approval, U.S. Steel Corp. would receive about $126 million in satisfaction of its claims and would provide shared services to U.S. Steel Canada.

Write to Josh Beckerman at [e-mail]

(END) Dow Jones Newswires

November 01, 2016 18:45 ET (22:45 GMT)

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