April 26, 2006 — United States Steel Corp. reported net income of $256 million on net sales of $3.7 billion for the first quarter of 2006.

The $256 million net income ($2.04 per diluted share) compares to fourth quarter 2005 net income of $109 million ($0.85 per diluted share) and first quarter 2005 net income of $459 million ($3.51 per diluted share). Net sales, $3.7 billion, compare to net sales of $3.5 billion in the previous quarter, and net sales of $3.8 billion in the year-ago first quarter.

Commenting on results, U. S. Steel Chairman and CEO John P. Surma said, "We had a strong first quarter with results significantly improved from the previous quarter, reflecting robust demand and continued firm prices across all business units. Tubular reported another outstanding quarter with operating income of $177 million, a record for this segment."

Income from operations was $369 million, which compares with income from operations of $222 million in the fourth quarter of 2005 and income from operations of $648 million in the first quarter of 2005.

Other items not allocated to segments consisted of an asset impairment charge, which reduced net income by $5 million (4 cents per diluted share). Fourth quarter 2005 results included an income tax charge of $16 million related to the repatriation of foreign earnings. This charge and other items not allocated to segments reduced fourth quarter 2005 net income by $39 million (30 cents per diluted share). Other items not allocated to segments increased first quarter 2005 net income by $58 million (45 cents per diluted share).

No shares of common stock were repurchased during the first quarter of 2006.

Reportable Segments and Other Businesses—U. S. Steel's reportable segments and Other Businesses reported segment income from operations of $429 million ($80 per ton) in the first quarter of 2006. This compares to segment income from operations of $313 million ($63 per ton) in the fourth quarter of 2005 and $660 million ($129 per ton) in the first quarter of 2005.

Segment results improved from the previous quarter as shipments and prices increased for Flat-rolled and Tubular. Flat-rolled also benefited from lower natural gas costs and reduced outage costs as the Gary No. 14 blast furnace started up successfully during the quarter and has been running well. U. S. Steel Europe (USSE) also reported increased segment income on higher shipment volumes. Results for Other Businesses declined mainly due to seasonal effects at iron ore operations in Minnesota.

Outlook—Looking ahead to the second quarter, Surma said, “We are entering the quarter with good momentum and we expect strong results as demand in key markets remains firm and our people and facilities are performing well.

“We expect second quarter Flat-rolled results to improve from the first quarter as shipment volumes continue to increase and average prices and costs remain comparable to first quarter levels. For USSE, we expect improvements in second quarter shipments to be partially offset by higher costs, while average prices should be comparable to first quarter levels.

“Prices and shipments for Tubular in second quarter 2006 are expected to be lower than first quarter levels as shipments and product mix will be negatively affected by planned maintenance outages at our tubular operations. Second quarter 2006 results for Other Businesses should improve as a result of normal seasonal effects at iron ore operations in Minnesota.”