UNITED STATES STEEL CORP (X)·Q3 2024 Earnings Summary

Executive Summary

• Q3 2024 delivered $3.85B net sales, $0.48 GAAP EPS, $0.56 adjusted EPS, and $319M adjusted EBITDA; results declined sequentially on weaker average selling prices but modestly exceeded September guidance ($0.44–$0.48 adjusted EPS; ~$300M adjusted EBITDA). First coil at Big River 2 (BR2) marks a strategic milestone supporting future mix upgrades and cash generation .
• Management guided Q4 2024 adjusted EBITDA to $225–$275M, citing lower lagging ASP in Flat-Rolled, an improvement in Mini Mill (despite ~$25M BR2 start-up/one-time costs), lower Europe on absence of CO2 benefit, and Tubular roughly flat; sequential pressure in Flat-Rolled is the primary driver .
• USSE (Europe) benefited in Q3 from a one-time favorable CO2 allocation adjustment; Mini Mill margins were held back by ~$40M start-up costs; Tubular experienced weaker pricing, as expected .
• No earnings call was held due to the pending Nippon Steel transaction; investor materials were released concurrently, and deal closing efforts progressed with additional $1.3B investment commitments by Nippon Steel in Mon Valley and Gary .

What Went Well and What Went Wrong

What Went Well

• BR2 reached first coil on Oct 31, with shipments expected to begin in Q4; management emphasized >$4B of growth capex executed (NGO electrical steel and dual Galvalume/Galvanized line), enhancing product mix and future free cash flow: “We are very pleased to announce that we achieved first coil at Big River 2 (BR2)…building upon our more resilient earnings with increasing free cash flow.” .
• Flat-Rolled resilience: despite softer selling prices, segment EBIT was $106M and segment EBITDA $246M in Q3; management cited strong commercial strategy, diverse product mix, and purposeful increase in contracted volumes .
• Europe offset macro headwinds: USSE posted positive segment EBIT of $7M and EBITDA of $39M, supported by a one-time favorable CO2 emissions reserve adjustment .

What Went Wrong

• Price headwinds across segments reduced adjusted EBITDA from $443M in Q2 to $319M in Q3, while net sales fell from $4.12B to $3.85B; Flat-Rolled and Mini Mill faced lower average realized prices and volume softness .
• Mini Mill profitability was suppressed by ~$40M start-up and construction costs in Q3 (BR2 and other projects), contributing to a segment EBITDA of $22M; absent these costs, management noted ~11% EBITDA margins .
• Tubular weakened on benchmark price declines, moving from $42M EBITDA in Q2 to $9M in Q3; management framed this as expected given the pricing environment .

Financial Results

Consolidated Results (GAAP and Non-GAAP)

YoY reference (Q3 2023):

• Net Sales: $4.431B
• Adjusted EPS: $1.40
• Adjusted EBITDA: $578M; margin 13.0%

Estimates comparison:

• S&P Global consensus was unavailable for this ticker due to data mapping limitations; comparisons to Wall Street consensus could not be presented. Values retrieved from S&P Global.*

Segment Breakdown

KPIs

Average realized price ($/net ton)

Shipments (thousands of net tons)

Capital expenditures ($USD Millions)

Guidance Changes

Management noted Q4 segment cadence: slight decrease in Flat-Rolled on lagging ASP, improved Mini Mill on better pricing/volumes despite BR2 costs, lower Europe without CO2 allocation benefit, and Tubular roughly consistent .

Earnings Call Themes & Trends

Note: The company did not hold an earnings conference call for Q3 due to the pending Nippon Steel transaction; earnings materials and segment data were released concurrently .

Management Commentary

• “Third quarter adjusted EBITDA of $319 million demonstrated resilience in our business model despite the weaker average selling prices experienced across our operating segments.” — David B. Burritt, President & CEO .
• “We achieved first coil at Big River 2…Congratulations to the Big River team on safely delivering over $4 billion of growth capital investments…” .
• “We continue to work towards closing by year-end…Nippon Steel…has committed to invest at least $1.3 billion…increasing the total capital commitment to at least $2.7 billion.” .

Q&A Highlights

The company did not hold an earnings conference call for Q3 2024 due to the pending Nippon Steel transaction; therefore, there was no Q&A session. Materials were posted to the website in lieu of a call .

Estimates Context

• Wall Street consensus via S&P Global for Q3 2024 was unavailable due to a data mapping limitation for this ticker; accordingly, we cannot present EPS or revenue estimate comparisons. Values retrieved from S&P Global.*
• As a proxy, the company’s September guidance called for adjusted EPS of $0.44–$0.48 and adjusted EBITDA of ~$300M; actuals came in at $0.56 and $319M, respectively .

Key Takeaways for Investors

• Sequential softness driven by ASP declines: consolidated adjusted EBITDA fell to $319M; management expects further Flat-Rolled pressure in Q4 due to lagging ASP, partially offset by Mini Mill improvement as BR2 ramps .
• Strategic inflection: BR2’s first coil and finishing assets (NGO, dual coating) should drive a higher through-cycle margin mix, with start-up costs rolling down in Q4 ($25M vs $40M in Q3) .
• Europe’s Q3 outperformance was one-off: USSE’s EBITDA benefited from a CO2 allocation adjustment; underlying demand/pricing remain weak heading into Q4 .
• Tubular remains pricing-sensitive: EBITDA compressed to $9M in Q3; Q4 expected broadly consistent absent outages .
• Liquidity remains strong at ~$4.1B with $1.8B cash, supporting transition through strategic capex completion and deal process .
• Transaction catalyst: arbitration successorship decision and added Nippon Steel commitments ($1.3B) at key facilities strengthen the path to closing; management targets year-end completion, a potential stock narrative driver .

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Additional Detail Tables

YoY Comparison (Q3 2023 vs Q3 2024)

Liquidity and Balance Indicators (snapshot)

Non-GAAP Reconciliations and Adjustments referenced are provided in company materials .