US Steel posts 3Q loss of $1.79 billion
PITTSBURGH (AP) — U.S. Steel Corp. on Monday reported a third-quarter loss of $1.79 billion, reflecting the huge impairment charge on the value of its steel-making operations that it warned about two weeks ago.
Excluding the charge, its loss was smaller than Wall Street expected, but revenue was below predictions. Its stock fell.
The net loss in the quarter through September amounted to $12.38 per share. Excluding the impairment charge, the loss came to 14 cents per share, not as bad as the 45 cents per share loss expected by analysts polled by FactSet.
Revenue fell 11 percent to $4.13 billion, below the $4.33 billion expected by analysts.
U.S. Steel’s stock dropped $1.22, or 5.2 percent to $22.20 in after-hours trading following the release of the earnings report.
The Pittsburgh company said earlier this month that it would book a charge based on the tepid pace of the economic recovery, excess global steelmaking capacity and lower prices. The non-cash “goodwill” impairment charge was applied to the company’s North American flat-rolled and Texas Operations units.
Companies are required to take a goodwill charge if they determine that the carrying value of an asset exceeds its fair value.
CEO Mario Longhi said in a statement the third-quarter results reflected “a meaningful improvement” in the company’s flat-rolled business as higher prices and lower repairs and maintenance costs more than made up for reduced shipments. The benefits were partially offset by a scheduled blast-furnace outage in its European operations.
For the fourth quarter, Longhi said U.S. Steel expects a decline in its reportable segment and other businesses income from the $113 million it posted in the third quarter, due mainly to planned maintenance outages.