U.S. Steel (X) guides Q4 EPS below consensus

United States Steel Corporation (NYSE: X) today provided fourth quarter 2024 adjusted net earnings per diluted share guidance of ($0.29) to ($0.25). Fourth quarter 2024 adjusted EBITDA is expected to be approximately $150 million.

(Consensus sees fourth quarter EPS of $0.24 and fourth quarter EBITDA of $261.7 million)

“The fourth quarter marked a critical milestone towards our Best for All® future, as the team completed execution on over $4 billion of growth capital investments with first coil achieved at Big River 2 (BR2) on October 31, 2024 and shipments to customers beginning in December. Aligned with our commercial strategy, we look forward to further strengthening our resilient earnings with increasing free cash flow,” commented U. S. Steel President and Chief Executive Officer David B. Burritt.

Burritt continued, “Adjusted EBITDA guidance of $150 million is below our prior fourth quarter outlook. Steel prices remained depressed and BR2 ramp-related costs exert pressure on the quarter, while the Big River team works towards increasing prime ton production in our new mill. Despite the challenging pricing environment across all segments, the North American Flat-Rolled segment continues to deliver strong EBITDA primarily through its robust commercial strategy and a diverse product mix. In Europe, the demand and pricing environment remains weak. To meet production volume requirements after unplanned downtime from a fire at the #1 Caster, we are temporarily operating three blast furnaces beginning December 7, but expect to return to two blast furnaces by January. The Tubular segment continues to face pressure from a weak pricing environment.”

Fourth Quarter Adjusted EBITDA Commentary

The Flat-Rolled segment’s adjusted EBITDA is expected to be lower than the third quarter due to lower selling prices and volumes, and increased outage and maintenance activity. Despite the weak demand environment, NAFR's diverse commercial portfolio continues to provide resilience, as the team maintains a strong focus on operations and cost management.

The Mini Mill segment’s adjusted EBITDA is expected to be lower than the third quarter due to lower volumes. For the fourth quarter, we expect approximately $30 million in related start-up and one-time construction costs, and $20 million in ramp-related impact from BR2. These costs are included in our fourth quarter Adjusted EBITDA guidance for the Mini Mill segment. We look to steadily ramp to full capacity in 2025.

The European segment’s adjusted EBITDA is expected to be lower than the third quarter, largely due to the unfavorable impact of weak demand, resulting in lower volumes, average selling prices, and volume inefficiencies. The third quarter included a favorable adjustment related to the reserve for CO2 emissions, which is not expected in the fourth quarter.

The Tubular segment’s adjusted EBITDA is expected to be higher than the third quarter, primarily due to increased volume and lower costs due to the absence of outage activity.

Note: This reconciliation excludes the impact of the Company’s quarterly adjustment related to the surplus VEBA assets and certain transaction-related costs. See Note 18 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, for an explanation of the surplus VEBA assets. The excluded items are not expected to impact adjusted EBITDA.

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