uploads/2017/08/part-9-cash-flows-1.png

It’s Raining Cash for U.S. Steel amid Strong Markets

By

Updated

Raining cash

Previously we looked at steel companies’ (XME) 2Q17 EBITDA (earnings before interest, tax, depreciation, and amortization). In this part, we’ll look at 2Q17 free cash flows. You can define free cash flows as operating cash flows minus capital expenditure.

Article continues below advertisement

2Q17 free cash flows

  • AK Steel (AKS) generated free cash flow of $147.0 million in 2Q17 compared to $3.8 million in 1Q17. It generated free cash flow of $111.0 million in 2Q16. The yearly rise in AK Steel’s cash flow was among the key positives in its 2Q17 earnings report. You can read Why Markets Were Enthusiastic about AK Steel’s 2Q17 Results to find out more about AK Steel’s 2Q17 earnings.
  • ArcelorMittal (MT) generated free cash flow of $648.0 million in 2Q17 compared to $348.0 million in 2Q16. The company generated negative free cash flow in 1Q17 mainly due to working capital build-up due to seasonal factors.
  • U.S. Steel (X) generated free cash flow of $304.0 million in 2Q17 compared to -$182.0 million in the sequential quarter. Analysts were expecting U.S. Steel to post negative free cash flow in 2Q17 as the company works to revitalize its facilities, which is expected to increase its capital expenditure.
  • Nucor (NUE) reported free cash flow of $8.0 million in 2Q17, which is much lower than the previous quarters. The company reported free cash flow of $149.0 million in 1Q17 and $160.0 million in 2Q16.
  • Steel Dynamics reported a steep fall in its 2Q17 free cash flow. It generated free cash flow of $38.0 million in 2Q17 compared to $198.0 million in 1Q17 and $122.0 million in 2Q16.

In the next part, let’s see why Nucor and Steel Dynamics generated lower cash flows in 2Q17.

Advertisement

More From Market Realist