U.S. Steel predicts ‘best-ever’ second quarter on growing demand

U.S. Steel Corp. is predicting its “best” second quarter on growing steel demand from automakers to construction firms.

The Pittsburgh-based steelmaker is seeing consistently strong orders from equipment manufacturers for autos and appliances as well as from the construction industry, which will help the company extend record earnings for another quarter, Chief Executive Officer David Burritt told analysts Friday during U.S. Steel’s first-quarter earnings call.

“We delivered our best-ever first quarter and expect to do it again by delivering our best-ever second quarter,” Burritt said.

The company’s upbeat tone echoes that from Nucor Corp., Cleveland-Cliffs Inc. and Steel Dynamics, which all expressed optimistic sentiments about the market after reporting stronger-than-expected demand after posting first-quarter results. U.S. Steel reported adjusted earnings of $3.05 per share to top analysts estimates. 

U.S. Steel said it seeks to increase stock repurchase and “meaningfully” increase buybacks in the second quarter to reward investors in anticipation of some of its most profitable quarters ahead.

The steelmaker also said it found workarounds to mitigate disruptions of raw material supplies from the Russian invasion of Ukraine, getting iron ore, thermal coal and other materials from alternate sources including the seaborne market. U.S. Steel is getting “uninterrupted flow” of iron ore directly into its Slovakia mill, which has about 78 days of inventory, the CEO said. Shipment volume from Europe is also expected to be consistent in the coming quarter.

“We have materials coming in on a narrow-gauge rail from the West and a wide-gauge rail from the East,” Chief Financial Officer Christine Breves said in the call, adding that the variety of sources is due to planning before the war started.