U. S. Steel Issues Q1 Earnings Guidance
In a statement, U. S. Steel said its earnings are being impaired by low rig counts and falling oil prices in the U.S. In Europe, earnings are being offset by rising raw material costs and contract prices that haven’t caught up to spot prices, which are on the rise.
“Steel selling prices have steadily increased throughout the quarter, resulting in better than anticipated first quarter performance for our USSE segment to date. Still, the flow through of lower prices on our monthly and quarterly contracts and elevated raw material costs are limiting near-term financial performance,” the company said.
It also said it remains to be seen how the coronavirus pandemic will impact its operations.
“The global coronavirus outbreak is an unprecedented and rapidly evolving situation. It remains uncertain how long the situation will last and what the impacts will be for the full year,” it said.
Still, the company said its U.S. flat-rolled operations have performed well, and investments it is making in its assets are beginning to bear fruit.
“Strong performance on reliability, quality, and productivity, combined with a continued focus on driving sustainable cost improvements across the footprint, have contributed to a better than expected first quarter to date,” chief executive David Burritt said.
The company also said the market is benefiting from robust construction activity and an end to the destocking that marked much of 2019, which are driving up demand and pushing out lead times for product.