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U. S. Steel Posts US$1.5B Loss in 2015
01/27/2016 - 2015 will go down as a significant year for United States Steel Corporation, but for the wrong reasons: the integrated steelmaker posted a net loss of US$1.5 billion on the year, illustrating the difficult market conditions the company and other steelmakers are facing.
According to U. S. Steel, much of the loss arose from accounting charges related to restructuring projects and other strategic actions as well as to tax reductions that may not materialize.
Nevertheless, the year was a difficult one operationally, as sales and shipments declined sharply. And its Carnegie Way initiative, through which the company has been paring costs in a bid to return to profitability, was enough to offset the losses.
"The $815 million of Carnegie Way benefits we realized in 2015 show that we continue to make significant progress on our journey toward our goal of achieving economic profit across the business cycle. Our progress is real and it is substantial, but our fourth-quarter and full-year results show that it is not yet enough to fully overcome some of the worst market and business conditions we have seen," president and CEO Mario Longhi said in a statement .
On the year, the company recorded US$11.6 billion in sales. That’s down 34 percent from US$17.5 billion in 2014.
The company said low-cost imports, much of which it says is being unfairly traded, continued to impact both its flat rolled and tubular divisions. Its tubular business is additionally being hurt by low energy prices, which have lowered demand for steel.
Overall, U. S. Steel’s 2015 shipments were down nearly 22 percent to 15.5 million tons. Flat rolled shipments declined 14.4 percent to 10.6 million tons. Tubular shipments were down roughly 70 percent, falling to 593,000 tons.
Looking ahead, the company said that assuming the market remains as-is, it expects lower results in each of its operating segments in 2016.
"We are facing significant headwinds and uncertainty in many of the markets we serve but remain focused on continuing to improve our cost structure, developing differentiated solutions for our customers, and creating more reliable and agile operating capabilities,” Longhi said.
“We have a strong and growing pipeline of Carnegie Way projects that will provide benefits in our operating segments and all other areas of our company. The substantive changes and improvements we are making continue to increase our earnings power."
Nevertheless, the year was a difficult one operationally, as sales and shipments declined sharply. And its Carnegie Way initiative, through which the company has been paring costs in a bid to return to profitability, was enough to offset the losses.
"The $815 million of Carnegie Way benefits we realized in 2015 show that we continue to make significant progress on our journey toward our goal of achieving economic profit across the business cycle. Our progress is real and it is substantial, but our fourth-quarter and full-year results show that it is not yet enough to fully overcome some of the worst market and business conditions we have seen," president and CEO Mario Longhi said in a statement .
On the year, the company recorded US$11.6 billion in sales. That’s down 34 percent from US$17.5 billion in 2014.
The company said low-cost imports, much of which it says is being unfairly traded, continued to impact both its flat rolled and tubular divisions. Its tubular business is additionally being hurt by low energy prices, which have lowered demand for steel.
Overall, U. S. Steel’s 2015 shipments were down nearly 22 percent to 15.5 million tons. Flat rolled shipments declined 14.4 percent to 10.6 million tons. Tubular shipments were down roughly 70 percent, falling to 593,000 tons.
Looking ahead, the company said that assuming the market remains as-is, it expects lower results in each of its operating segments in 2016.
"We are facing significant headwinds and uncertainty in many of the markets we serve but remain focused on continuing to improve our cost structure, developing differentiated solutions for our customers, and creating more reliable and agile operating capabilities,” Longhi said.
“We have a strong and growing pipeline of Carnegie Way projects that will provide benefits in our operating segments and all other areas of our company. The substantive changes and improvements we are making continue to increase our earnings power."
