US Steel reported a $180 million net loss for the first quarter with losses in the flat-rolled steel and tubular segments, the company said Tuesday.
The $180 million net loss was on net sales of $2.7 billion," USS said in its earnings statement. The net loss was less than the $340 million net loss in Q1 2016, which was on net sales of $2.3 billion.
The flat-rolled segment recorded a $90 million loss for the quarter, which was a smaller loss than the $188 million loss seen in Q1 2016. However, the negative result for the segment came after a $65 million profit in the fourth quarter.
USS said the segment suffered from high raw material costs, more planned outages, restart costs related to the restart of the Granite City, Illinois hot-strip mill and the company's Keetac iron ore mine in Minnesota as well as seasonally lower results from mining operations. Higher realized prices and increased shipments helped to partially offset these negative factors, the company said.
The tubular business also lost $57 million in Q1, which was less than the $64 million lost in Q1 2016.
"First quarter results for our Tubular segment improved compared with the fourth quarter due to higher prices, increased shipments, lower spending and the absence of an unfavorable lower of cost or market adjustment for obsolete inventory taken in the fourth quarter," USS said.
US Steel Europe made $87 million in the quarter with the help of higher selling prices. This was up from a $14 million loss in the first quarter of last year.
CEO Mario Longhi said the company is positioning itself for long-term growth. "As we get deeper into our asset revitalization efforts, we are seeing opportunities for greater efficiency in implementing our plan. We believe we can create more long-term and sustainable value by moving faster now. We have made the strategic decision to accelerate our efforts to resolve the issues that challenge our ability to achieve sustainable long-term profitability," Longhi said in a statement.
US Steel said "if market conditions, which include spot prices, raw material costs, customer demand, import volumes, supply chain inventories, rig counts and energy prices, remain at their current levels" it expects to reach $260 million in net earnings for all of 2017 and improved results in its flat-rolled, European and tubular segments.
USS will hold its earnings call on Wednesday morning.
