U.S. Steel Slowing Spending, Idling Some Operations Amid Virus
(Bloomberg) -- U.S. Steel Corp. is increasing borrowings under its revolving credit facility, cutting spending plans and idling operations as the coronavirus pandemic continues to take its toll on American manufacturing.
The Pittsburgh-based company said it’s reducing 2020 capital spending by $125 million to about $750 million for the year, and is increasing its borrowings under its revolving credit facility by $800 million in order to boost its cash position.
The steelmaker also will move up planned outages, and temporarily shut one of the furnaces at Granite City Works effective immediately. Beginning in late May, it plans to idle “all or most” or its Lone Star and Lorain tubular operations indefinitely in response to declining global demand in the oil sector.
“The actions we are announcing today make us stronger and enable us to weather the current situation to emerge as a leader in sustainable steel solutions for generations to come,” Chief Executive Officer David Burritt said Friday in a statement.
The statement was announced before the start of regular trading in New York, where U.S. Steel fell 3.4% to $5.90 at 9:12 a.m.
The company said it doesn’t expect these actions to “meaningfully impact” recently provided guidance for first-quarter adjusted profit, but they could affect its full-year earnings. “The company expects a meaningful reduction in demand for the full fiscal year, though an updated full-year estimate of third-party shipments for each of its operating segments cannot be determined at this time.”
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