U.S. Steel misses by $1.18, misses on revs; Guides FY17 EPS below consensus:
- Reports Q1 (Mar) loss of $0.83 per share, excluding non-recurring items, $1.18 worse than the Capital IQ Consensus of $0.35; revenues rose 16.4% year/year to $2.73 bln vs the $2.91 bln Capital IQ Consensus.
- First quarter results for our Flat-Rolled segment declined significantly compared with the fourth quarter, as we expected, primarily due to higher raw material costs, increased planned outage costs, seasonally lower results from our mining operations, and restart costs associated with the Granite City hot strip mill and our Keetac iron ore mine.
- Change in Accounting Estimate -- Capitalization and Depreciation Method
- During the first quarter of 2017, we completed a review of our accounting policy for property, plant and equipment depreciated on a group basis. As a result of this review, we changed our accounting method for property, plant and equipment from the group method of depreciation to the unitary method of depreciation, effective as of January 1, 2017.
2017 Outlook
- "Market conditions have continued to improve, and we will realize greater benefits as these improved conditions are recognized more fully in our future results.
- We issued equity last August to give us the financial strength and liquidity to position us to establish an asset revitalization plan large enough to resolve our issues, and to see that plan through to completion. 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.
- 2017 net earnings of approximately $260 million, or $1.50 per share (Capital IQ consensus $2.83), and adjusted EBITDA of approximately $1.1 billion;
- Results for our Flat-Rolled, European, and Tubular segments to be higher than 2016;
- Other Businesses to be comparable to 2016 and approximately $50 million of postretirement benefit expense.
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