US Steel In-Line, Dividend Cut

United States Steel Corp. (X - Analyst Report) reported a first quarter 2009 net loss of $439 million, or $3.78 per diluted share, compared to first quarter 2008 net income of $235 million, or $1.98 per diluted share.

Other items not allocated to segments in the first quarter of 2009 increased net income by $7 million, or 6 cents per diluted share. Other items not allocated to segments in the first quarter of 2008 reduced net income by $45 million, or 38 cents per diluted share.

Results for Flat-rolled in the first quarter of 2009 decreased substantially from the fourth quarter of 2008. Flat-rolled operated at 38 percent of raw steel capability in the first quarter of 2009 compared to 45 percent in the fourth quarter of 2008, and shipments decreased 24 percent to 2.1 million net tons. Average realized prices decreased by $90 per net ton to $715 per net ton.

Second quarter 2009 flat-rolled results are expected to improve slightly as compared to the first quarter of 2009, primarily due to the accruals in the first quarter for estimated future layoff benefits and losses on excess natural gas purchase contracts. These effects are expected to be offset by lower average realized prices and additional idled facility carrying costs. Shipments are expected to be in line with the first quarter of 2009.

The Board of Directors also reduced the quarterly dividend to 5 cents per share, which will result in annual cash savings of approximately $116 million.