U.S. Steel issues downside Q1 EPS guidance; Tubular segment continues to face pressure from lagged impacts of a weak pricing environment (41.06 -0.56)
- Co issues downside guidance for Q1 (Mar), sees EPS of (0.53)-($0.49), excluding non-recurring items, vs. ($0.32) FactSet Consensus. Adjusted EBITDA is expected to be approximately $125 million.
- The Flat-Rolled segment's adjusted EBITDA is expected to be lower than the fourth quarter primarily driven by typical seasonal logistics constraints in the mining sector, which will unwind in the second quarter. We anticipate that higher average selling prices and increased volumes will partially offset this mining impact.
- The Mini Mill segment's adjusted EBITDA is expected to be higher than the fourth quarter due to an increase in shipments. For the first quarter, we expect approximately $50 million in ramp-related impact from BR2. These costs are included in our first quarter adjusted EBITDA guidance for the Mini Mill segment.
- The European segment's adjusted EBITDA is expected to improve compared to the fourth quarter, largely due to an increase in shipments, volume efficiencies and favorable raw material pricing, yet the sector will continue to face pressures from a challenging demand environment in Europe.
- The Tubular segment's adjusted EBITDA is expected to be higher than the fourth quarter due to an increase in prime shipments and higher average selling prices.
- "Adjusted EBITDA guidance of $125 million is in line with our prior first quarter outlook. The North American Flat-Rolled segment's commercial strategy, combined with a strong emphasis on operational efficiencies and cost management, continues to drive strength within the segment. Our Mini Mill segment should see a sequential improvement based on increasing volumes from both Big River Steel (BRS) and Big River 2 (BR2). In Europe, the pricing environment has slightly improved, however demand remains subdued. We continue to manage our production levels in line with our customers' demand and our planned maintenance schedules. The Tubular segment continues to face pressure from the lagged impacts of a weak pricing environment, however, we remain optimistic for pricing improvements moving forward."