What a difference a year makes.
In the first quarter of 2017, U.S. Steel lost an unexpected $180 million, leading to the ouster of the then-chief executive officer, causing the stock price to plummet and prompting law firms to file class-action lawsuits on behalf of upset investors.
In the first quarter of this year, the Pittsburgh-based steelmaker made $18 million, or 10 cents per diluted share. The company's flat-rolled division, which including its local mills in Gary, Portage and East Chicago, made $33 million in net earnings, as compared to a loss of $88 million during the same time period last year.
"Our performance was significantly better than the first quarter of 2017, with improved results for all three of our reportable segments enabling four consecutive quarters of more predictable (earnings before interest, taxes, depreciation and amortization)," U.S. Steel President and Chief Executive Officer David Burritt said.
"In spite of operational issues related to weather and ongoing challenges with assets not yet revitalized, the first quarter of 2018 was in line with our expectations. During the first quarter, we also continued to improve our risk profile and strengthen our balance sheet through the successful completion of a $650 million senior unsecured notes offering, and the subsequent repayment of $780 million of our senior secured notes, with the repayment of the final $281 million being completed on April 12."
The steelmaker, one of the biggest employers in the industrial corridor along the lakefront, credited its recent investment in upgrading equipment at its mills, including asset revitalization projects at Gary Works, with some of the improvement on its balance sheet. U.S. Steel also has benefited from the Section 232 tariffs on most foreign steel and rising steel prices.
Its improving financial position allowed the company to pay down $225 million in debt over the past year, leaving it with just $1.5 billion in debt. Problems at Great Lakes Works in Michigan will reduce its EBITDA by about $30 million in the second quarter, but it still expects to make between $1.7 billion and $1.8 billion in EBITDA this year.
"We are beginning the second year of our asset revitalization program, and we are already seeing benefits from the investments in our assets," Burritt said. "It is prudent for us to anticipate the possibility of continued operational volatility for those assets yet to be revitalized. We remain focused on managing operating volatility to ensure we take care of our customers, and the restart of steelmaking at Granite City will increase our ability to do so."
"While there is uncertainty about how country-exemption and product-exclusion requests related to Section 232 will be resolved, we continue to invest in revitalizing our assets and developing innovative customer solutions," he said. "We are confident we will deliver our 2020 performance objectives."