United States Steel Guides Q2 Earnings Above-Consensus, Expects To Maintain $3B Cash At Quarter-End

Yesterday, United States Steel Corp X disclosed Q2 2023 guidance, expected cash position, and share repurchases.

The company expects adjusted EPS of $1.81-$1.86 (vs. consensus of $1.76) and adjusted EBITDA of around $775 million, reflecting expected higher selling prices and benefits of the diversified order book and operational metrics and cost efficiency enhancement endeavors.

The company expects adjusted EBITDA in Q2 to be higher than in Q1 in both the Flat-Rolled and Mini Mill segments.

On the other hand, it projects the European segment's adjusted EBITDA to return to positive.

The Tubular segment's adjusted EBITDA is projected to be strong but lower than Q1 2023.

"We continue to execute our strategy from a position of strength as our Best for All® strategic investments remain on-time and on-budget. Our next critical strategic milestone is the start-up of the non-grain oriented (NGO) electrical steel line at Big River Steel in the third quarter of this year. Once on-line, the NGO electrical steel line is expected to strengthen domestic supply chains and bring advanced manufacturing back to our shores as we serve our automotive customers with state-of-the-art electrical steel that is sustainable and exclusive to U. S. Steel," said David B. Burritt, President and CEO.

Repurchase: United States Steel anticipates to complete share buyback of around $75 million in Q2 2023 under its existing stock repurchase authorization of $500 million. 

By Q2-end, it projects to have repurchased around 17% of its outstanding shares since the beginning of December 2021, with over $1.1 billion returned to the shareholders.

The company forecasts the cash position to be around $3 billion at the end of Q2 2023.

In April, the company reported Q1 2023 revenues of $4.47 billion exceeding the consensus of $4.25 billion, and adjusted EPS of $0.77, beating the consensus of $0.64. 

As of March 31, 2023, cash and equivalents stood at $2.87 billion. 

Price Action: X shares are trading higher by 0.13% at $23.44 premarket on the last check Tuesday.

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