U.S. Steel Guidance Sees 'Improved Market Conditions' - TheStreet

U.S. Steel Guidance Sees 'Improved Market Conditions'

U.S. Steel says improved market conditions in June and July accelerated in August and September.
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U.S. Steel  (X) - Get Report said Friday that market conditions have improved in the past few months after the company was forced to idle furnaces due to the coronavirus pandemic.

Shares of the Pittsburgh steelmaking icon at last check were up 4.9% to $8.82. The shares closed up 8.4% on Thursday. 

In optimistic third-quarter guidance the company said it expected an adjusted loss of $1.45 a share, compared with the FactSet consensus of a loss of $1.52.

“Improving market conditions" in June and July "accelerated through August and September," President and Chief Executive David Burritt said in a statement. 

"Strengthening steel fundamentals and our ability to respond quickly to increasing customer demand are expected to result in significantly improved adjusted earnings before interest, taxes, depreciation and amortization in the third quarter.” 

Burritt added that “we have grown confident in the recovery that is underway in North America and Europe."

The company intends to acquire the remaining stake in Big River Steel of Osceola, Ark., which Burritt called "our top strategic priority." 

Last year, U.S. Steel said it would pay $700 million cash for a 49.9% stake in Big River Steel. And it holds an option to buy the rest by 2023.

In addition, Burritt said that by the end of the quarter, U.S. Steel plans to repay about $900 million of its U.S. asset backed loans, which will place its U.S. ABL borrowings below pre-covid-19 levels. 

"Our order book and lead times have improved, and we are increasingly confident in the sustained nature of market improvements," the company said. 

"We responded to an improving order book by restarting three blast furnaces that were temporarily idled earlier this year in response to the impacts from covid-19."