Why US Steel increased despite a loss in the second quarter (Part 1 of 10)
U.S. Steel Corporation
U.S. Steel Corporation (X) is the 13th largest steel producer globally with production of 20.4 million tons in 2013. It has been a bellwether of American industry. In a lot of ways, it’s a reflection of the rise and decline of the American manufacturing industry. U.S. Steel Corp. has major operations in the United States, Canada, and central Europe with several steel finishing joint ventures in Brazil and Mexico. It’s also involved in railroad and barge transportation services through its subsidiary Transtar Inc. and real estate operations through its U.S. Real Estate division.
Key reporting segments of U.S. Steel Corp.
U.S. Steel Corp. reports its results under the following segments:
- Flat Products – Under this segments it has hot rolled, cold rolled, and coated sheets to offer to its customers. The key buyers are the automotive, construction, and domestic appliance industry. This segment has an annual raw steel production capability of 22 million tons and remains the largest segment in revenue terms.
- Tubular Products – Tubular products are supplied to the oil, gas, and petrochemicals market. U.S. Steel Corp. remains the largest supplier of this segment in the combined U.S. and Canadian markets. This segment has annual raw steel production capability of five million tons and remains the most profitable segment for the company. It’s also referred to as oil country tubular goods (or OCTG).
- U.S. Steel Europe (or USSE) – The European operations of the company are reported under this segment where annual raw steel production capability is five million tons.
It’s important to note that we’re analyzing the second quarter results of U.S. Steel Corporation (X) which were released on July 29, 2014. The series is a must read for investors of U.S. Steel Corporation, ArcelorMittal (MT), Nucor Corporation (NUE), and Reliance Steel & Aluminum (RS). An alternate way of getting exposure to the steel industry is through the SPDR S&P Metals and Mining ETF (XME).
Browse this series on Market Realist:
- Part 2 - Overview: US Steel’s second quarter results
- Part 3 - Why the flat rolled segment is the Achilles heel of US Steel
- Part 4 - Why the tubular segment is the most lucrative for US Steel
- Investment & Company Information