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U.S. Steel turns $291 million profit in third quarter

A worker stands outside the U.S. Steel Corp. coke plant, part of the company's complex in Granite City, Illinois.

U.S. Steel turned a profit of $291 million in the third quarter, bringing in $1.62 in earnings per diluted share.

The flat-rolled segment, the division that includes Gary Works and other Northwest Indiana operations, turned a $305 million profit, offsetting a loss in tubular. It benefited greatly from an average price of $859 per ton for flat-rolled steel during the quarter, up from an average of $728 per ton during the third quarter of 2017 as a result of the Section 232 tariffs and improved market conditions.

"Our third quarter results were in line with our expectations, with a significant improvement in earnings from our flat-rolled segment and a return to profitability for our tubular segment," U.S. Steel CEO David Burritt said. "Market conditions remain solid, with stable end-user steel consumption. We experienced lower customer order rates for an extended period, driven by falling spot and index prices. However, we expect continued strength in steel demand will support favorable market conditions as we enter 2019."

The Pittsburgh-based steelmaker nearly doubled its quarterly profit year-over-year, after pulling in $147 million during the third quarter of last year.

"We expect results for our flat-rolled segment to continue to improve primarily due to increased shipments and lower maintenance and outage costs, partially offset by lower average realized prices," Burritt said. "Despite a softening in the energy tubulars market, we expect Tubular to continue to improve primarily due to increased shipments, partially offset by lower average realized prices. We expect results for our European segment to decrease primarily due to inventory revaluation adjustments related to raw material price volatility."

U.S. Steel expects to bring in $575 million in earnings before interest, taxes, depreciation, and amortization in the fourth quarter and $1.8 billion in earnings for the year.

The publicly traded steelmaker declared a dividend of $0.05 per share.

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Business Reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.