US Steel industry’s cash flows
2Q15 cash flows
In any enterprise, cash flow comes from operating, investing, or financing. Raising cash through the issue of debt comes under financing activities. On the other hand, cash flow from the disposal or purchase of fixed assets falls under investing activities.
Of the three forms of cash flow, operating cash flow is the most important for a company. Let’s explore the trend in various steel companies’ cash flow metrics in 2Q15.
- ArcelorMittal (MT) generated operating cash flows of $1,019 million in 2Q15. Free cash flow was $477 million in the quarter. ArcelorMittal posted a negative operating cash flow in 1Q15, largely due to inventory buildup. ArcelorMittal’s 2Q15 working capital came down by ~$400 million in the quarter, which added to the company’s operating cash flows. Nevertheless, for a company of ArcelorMittal’s size, these cash flows look miniscule.
- Steel Dynamics’ (STLD) operating cash flows totaled $309.2 million in 2Q15. Free cash flow was $286.4 million. Steel Dynamics’ operating cash flows increased in 2Q15 compared to the previous quarter.
- Nucor (NUE) generated operating cash flows of $631 million in 2Q15, which was slightly higher than 1Q15. Nucor’s free cash flow totaled $533.3 million in the quarter. Currently, Nucor forms 2.73% of the Materials Select Sector SPDR ETF (XLB).
- AK Steel (AKS) generated positive operating cash flows of $86.2 million in 2Q15. Its operating cash flows were largely due to lower working capital requirements. AK Steel has managed to bring down its cash conversion cycle in 2Q15. AK Steel’s free cash flow stood at $65.2 million in 2Q15.
- U.S. Steel Corporation (X) generated operating cash flows of $79 million in 2Q15. However, just like AK Steel, its positive operating cash flows were largely due to less working capital requirement. However, U.S. Steel generated negative free cash flows of $25 million in the quarter.
You can read in-depth earning reviews of these steel companies by visiting Market Realist’s Steel page.