U.S. Steel’s 4Q16 profitability
There are several metrics you can use to measure an enterprise’s profitability. Net profit is widely used to measure a company’s profitability. For companies in the commodities space (XLB) like ArcelorMittal (MT), Nucor (NUE), and AK Steel (AKS), EBITDA (earnings before interest, tax, depreciation, and amortization) is generally used.
U.S. Steel (X) generated adjusted EBITDA of $211 million in 4Q16 and $510 million in fiscal 2016. Freeport’s adjusted EBITDA rose significantly as compared to the corresponding period last year. The company had generated an adjusted EBITDA of -$13 million in 4Q15 and $202 million in fiscal 2015. However, U.S. Steel’s 4Q16 EBITDA fell as compared to 3Q16 where the company managed to post adjusted EBITDA of $272 million. Notably, U.S. Steel’s 3Q16 EBITDA was the highest since 4Q14.
- The Flat Rolled segment, which is U.S. Steel’s largest segment in terms of revenues, posted adjusted EBITDA of $147 million in 4Q16 as compared to $201 million in 3Q16 and -$97 million in 4Q16.
- U.S. Steel’s Europe operations generated adjusted EBITDA of $83 million in 4Q16 as compared to $102 million in 3Q16 and $5 million in 4Q15.
- U.S. Steel’s Tubular segment continues to reel under the impact of lower energy prices. The segment reported adjusted EBITDA of -$70 million in 4Q16 as compared to EBITDA of -$58 million in 3Q16 and -$47 million in 4Q15. Notably, U.S. Steel’s Tubular operations reported lower yearly performance in 4Q16 while the other two segments managed to post a yearly increase in EBITDA.
In the next article, we’ll look at the other key takeaways from U.S. Steel’s 4Q16 earnings call.