U.S. Steel Is ‘Confident’ the Worst of 2020 in Rear-View Mirror

(Bloomberg) -- U.S. Steel Corp. is confident the second quarter was the trough for the year, suggesting the worst may be behind the company after the impact of the pandemic forced shutdowns from automobiles to construction.

The Pittsburgh-based company said it’s encouraged by the recovery in market conditions in the automotive industry, and said construction demand is exceeding its expectations. This comes a week after the steelmaker told customers it was raising prices, a signal that producers see demand rebounding despite uncertain prospects.

“We are encouraged by the accelerating pace of incoming orders across our steelmaking and sheet finishing facilities,” Chief Executive David Burritt said Thursday in a statement. “While a portion of operating inefficiencies will continue to impact third-quarter performance, we are confident that the second quarter was the trough for the year.”

The company reported an adjusted per-share loss of $2.67 in the second quarter, wider than the average analyst estimate for a loss of $2.49. Sales were $2.09 billion, topping the $1.84 billion average estimate.

The benchmark steel price in the U.S. is down almost 19% this year, on pace for its worst annual decline since 2015. U.S. Steel has been hit particularly hard compared with peers during this pandemic given that a sizeable portion of its sales are to automotive producers, which effectively shuttered production for about two months during the second quarter.

Shares gained 1.9% in after-hours trading in New York as of 4:34 p.m. The company hosts a call with analysts at 8:30 a.m. New York time on Friday.

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