UNITED STATES STEEL CORP (X)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 delivered adjusted EBITDA of $190M and adjusted diluted EPS of -$0.13 amid sequential ASP pressure; North American Flat-Rolled held a 10% EBITDA margin while Mini Mill posted a small loss on BR2 ramp costs and USSE remained challenged .
• Results came in above late-December guidance for adjusted EBITDA (~$150M) and adjusted EPS (-$0.25 to -$0.29), driven by better-than-expected cost performance and BR2 shipments in December; however, both metrics were below the October outlook of $225–$275M adjusted EBITDA, reflecting a weaker price environment and ramp-related costs .
• Q1 2025 outlook guides adjusted EBITDA to $100–$150M; management expects seasonal mining logistics to weigh on Flat-Rolled while BR2 volume increases help Mini Mill even as ~$50M ramp costs persist, with Europe slightly improving off low levels and Tubular largely consistent .
• Liquidity was ~$3.6B including ~$1.4B cash; net debt stood at ~$2.8B, supporting a $0.05 dividend declared for March 12, 2025 .
• Stock reaction catalysts: BR2 ramp execution, Q1 guidance trajectory, EU pricing/demand normalization, and ongoing Nippon Steel transaction litigation (management reiterated commitment to the $55/share deal) .

What Went Well and What Went Wrong

What Went Well

• North American Flat-Rolled delivered a 10% EBITDA margin in Q4, supported by a resilient commercial strategy, diversified mix, and cost control: “benefiting from a resilient commercial strategy, diverse product mix and continued focus on cost control” .
• Initial BR2 shipments commenced in December, with customer feedback on quality “excellent” and a steady ramp expected into Q1—management highlighted ~$4B strategic growth capex now behind the company and a free cash flow inflection expected in 2025 .
• Tubular improved sequentially, with higher shipments driving better earnings despite a challenging price environment .

What Went Wrong

• Mini Mill posted negative EBITDA (-$8M) in Q4 due to lower shipments/ASP and BR2 ramp-related and one-time construction costs; EBITDA margin excluding BR2 impact was 8%, underscoring ramp drag on reported results .
• Europe (USSE) remained pressured by weak demand/pricing, resulting in negative EBITDA (-$35M), with unfavorable commercial conditions and higher energy costs noted .
• Company-level adjusted EBITDA declined sequentially ($319M in Q3 to $190M in Q4) as ASP compressed across segments; adjusted EBITDA margin fell to 5% vs 8% in Q3 .

Financial Results

Guidance Changes

Dividend: $0.05 declared, payable March 12, 2025 (record date Feb 10, 2025) .

Earnings Call Themes & Trends

Management Commentary

• “Our fourth quarter adjusted EBITDA of $190 million demonstrates continued strong performance amidst a sequentially weaker average selling price and demand environment across all our operating segments… The North American Flat-Rolled segment generated 10% EBITDA margin…” — David B. Burritt, President & CEO .
• “We are very pleased to see deliveries to customers from BR2 commence in early December and continue to see a steady ramp up in shipments into the first quarter… approximately $4 billion of transformational growth investments… we expect to generate positive free cash flow in 2025.” — David B. Burritt .

Q&A Highlights

• Q4 2024 earnings call transcript was not available in our document set; we relied on the press release and earnings presentation for qualitative themes and segment outlooks .

Estimates Context

• S&P Global consensus for Q4 2024 EPS, revenue, and EBITDA was unavailable due to a CIQ mapping issue for ticker X at the time of analysis; therefore, comparisons to Wall Street estimates could not be provided. When available, we anchor comparisons on S&P Global consensus.

Key Takeaways for Investors

• NAFR resilience remains a pillar: sustaining a 10% EBITDA margin in a soft ASP environment suggests defensible earnings power from mix, contracts, and cost discipline .
• Mini Mill profitability should improve as BR2 ramps; near-term reported results will be burdened by ~$50M ramp costs in Q1, but volume gains are expected to offset part of the drag—watch the pace of BR2 acceptance and throughput .
• Europe remains the principal risk: negative EBITDA and unfavorable commercial conditions persist; any stabilization in EU pricing/demand or energy costs would be a notable upside lever .
• Q4 actuals exceeded lowered guidance; the bar was reset in December, and delivery above that signals execution against a tougher backdrop—Q1 guide remains conservative, implying limited near-term catalysts absent pricing tailwinds .
• Liquidity and net debt are adequate to bridge the ramp: ~$3.6B liquidity and ~$1.4B cash support ongoing operations and modest shareholder returns (dividend maintained), while net debt of ~$2.8B warrants attention to FCF conversion in 2025 .
• Event risk: NSC transaction litigation and activism create headline volatility; outcomes could materially affect valuation and capital allocation priorities—monitor legal milestones and Board actions .
• Trading lens: Near term, results are pricing-sensitive; positive signals would include U.S. steel price stabilization, stronger BR2 volumes, and a benign EU cost backdrop. Medium-term thesis hinges on BR2 run-rate profitability and FCF inflection in 2025 .