US Steel (X) EPS guidance Q2 above consensus
Today, United States Steel (X) filed adjusted net earnings for the second quarter of 2023 per diluted share guidance of $1.81 to $1.86, which is above consensus of $1.76. Adjusted EBITDA in the second quarter of 2023 is expected to be approximately $775 million.
Commenting on our second quarter guidance, President and CEO David B. Borrett: “We expect to deliver another strong quarter of operational and financial performance in terms of safety 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 a diversified order book, achieving higher selling prices and management actions that It continues to improve operating metrics and cost performance across all of our segments. Our expected second-quarter performance supports an expected quarter-end cash position of approximately $3 billion and $75 million in share repurchases in the quarter.”
Porritt concluded, “We continue to execute our strategy from a position of strength where our Best for All® strategic investments remain on time and on budget. The next significant strategic milestone is the commissioning of Big River Steel’s non-grain electric steel (NGO) line in the quarter The third this year. Once online, the NGO Electric Steel Line is expected to strengthen local supply chains and bring advanced manufacturing back to our shores as we serve our automotive customers with US Steel’s latest and exclusive sustainable electric steel.”
Stock return update
The company expects to complete approximately $75 million in common stock repurchases in the second quarter under its existing $500 million stock repurchase authorization. By the end of the quarter, the company expects to buy back approximately 17% of its diluted shares outstanding since the beginning of December 2021, which equates to more than $1.1 billion returned directly to shareholders.
Suspension of adjusted EBITDA for the second quarter
Adjusted EBITDA for the flat segment is expected to be higher than in the first quarter. The segment’s diversified exposure in the end market and growth in strategic markets helped balance the order book despite changing market dynamics throughout the quarter. Also, further realization of higher steel prices in the sector average selling price and absence of seasonal mining operations in the first quarter is expected to effectively contribute to higher EBITDA.
Adjusted EBITDA for the small mill segment is expected to be higher than in 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. Realizing trade tailwinds in the second quarter, lower energy costs and increased efficiencies from operating all three blast furnaces should each contribute to higher sequential adjusted EBITDA.
Adjusted EBITDA for the tubular segment is expected to remain strong but lower than in the first quarter. Lower average spot selling prices and persistently high import levels moderated the sector’s performance after 10 consecutive quarters of increasing EBITDA. Our value-added product mix and exposure to more flexible vats and a cost-effective electric arc furnace in Fairfield, Alabama continues to support strong results in the company’s control.