u.s. Steel (X – Analyst Report) logged a wider loss in the second quarter of 2015, hurt by a sizable charge to write-down its retained interest in its Canadian unit – U. S. Steel Canada (“USSC”) – and lower prices due to a torrent of cheap steel imports.
U.S. Steel, once the country's first billion-dollar corporation, continued to face significant challenges from a flood of unfairly traded steel imports. High levels of imports led to lower steel pricing and volumes in the company's Flat-Rolled segment. Its tubular business also faced headwinds from lower oil prices. These impacts were partly offset by the company's efforts to improve its cost structure.
U.S. Steel posted a net loss of $261 million or $1.79 per share in the quarter versus a loss of $18 million or 12 cents per share posted a year ago.
Barring one-time items, loss was 79 cents per share in the reported quarter, higher than the Zacks Consensus Estimate of a loss of 69 cents. One-time items include $136 million of write down charges related to USSC which has been under creditor protection since Sep 2014.
Revenues plummeted 34% year over year to $2,900 million, falling well behind the Zacks Consensus Estimate of $3,197 million.
U.S. Steel shares fell around 4% in extended trading yesterday.
Segment Highlights
Results from U.S. Steel's Flat-Rolled segment were hurt by a surge of steel imports in the quarter, triggered by a strengthening U.S. dollar. The division posted a loss of $64 million versus a profit of $30 million in the year-ago quarter. Imports increased during the quarter, thereby reducing spot market prices of steel.
The U.S. Steel Europe (“USSE”) segment recorded a profit of $20 million in the reported quarter, down from last year's profit of $38 million as well as $37 million in the previous quarter. Lower raw material costs and a modest increase in euro-based prices were more than offset by reduced shipments and higher repairs and maintenance costs due to planned maintenance outages.
U.S. Steel's Tubular segment registered a loss of $66 million in the quarter versus a profit of $47 million a year ago and $1 million in the prior quarter. The sequential decline was due to reduced shipments resulting from lower drilling activity (due to lower oil prices) and significant volumes of tubular imports.
