United States Steel Corporation (X) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $51 million, or $ 0.32 a share in the quarter, against a net loss of $173 million, or $1.18 a share in the last year period. On an adjusted basis, net profit for the quarter stood at $65 million, or $0.40 a share compared with a net loss of $103 million, or $0.48 a share in the last year period.  

Revenue during the quarter dropped 5.09 percent to $2,686 million from $2,830 million in the previous year period. Gross margin for the quarter expanded 592 basis points over the previous year period to 12.14 percent. Operating margin for the quarter period stood at positive 4.91 percent as compared to a negative 6.01 percent for the previous year period.

Operating income for the quarter was $132 million, compared with an operating loss of $170 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $272 million compared with $85 million in the prior year period. At the same time, adjusted EBITDA margin improved 712 basis points in the quarter to 10.13 percent from 3 percent in the last year period.

Commenting on results, U. S. Steel President and Chief Executive Officer Mario Longhi said, "Our third quarter results improved significantly from the second quarter as each of our segments improved, resulting in our highest quarterly segment income since the fourth quarter of 2014. We faced some operational challenges that limited our ability to realize the full benefits of an improved pricing environment, but we continued to make progress in our Carnegie Way transformation efforts. With our very strong cash and liquidity position, we remain focused on the investments that we need to continue to make to revitalize our facilities and deliver value-enhancing solutions for our customers."

Operating cash flow improves significantly
United States Steel Corporation has generated cash of $577 million from operating activities during the nine month period, up 128.06 percent or $324 million, when compared with the last year period.

The company has spent $282 million cash to meet investing activities during the nine month period as against cash outgo of $371 million in the last year period. It has incurred net capital expenditure of $262 million on net basis during the nine month period, down 25.57 percent or $90 million from year ago period.

Cash flow from financing activities was $388 million for the nine month period as against cash outgo of $39 million in the last year period.

Cash and cash equivalents stood at $1,445 million as on Sep. 30, 2016, up 24.03 percent or $280 million from $1,165 million on Sep. 30, 2015.

Working capital decreases marginally
United States Steel Corporation has witnessed a decline in the working capital over the last year. It stood at $2,014 million as at Sep. 30, 2016, down 1.85 percent or $38 million from $2,052 million on Sep. 30, 2015. Current ratio was at 1.84 as on Sep. 30, 2016, up from 1.62 on Sep. 30, 2015.

Cash conversion cycle (CCC) has decreased to 15 days for the quarter from 69 days for the last year period. Days sales outstanding were almost stable at 46 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 34 days for the quarter compared with 83 days for the previous year period. At the same time, days payable outstanding went up to 65 days for the quarter from 59 for the same period last year.

Debt comes down
United States Steel Corporation has recorded a decline in total debt over the last one year. It stood at $3,080 million as on Sep. 30, 2016, down 11.72 percent or $409 million from $3,489 million on Sep. 30, 2015. Total debt was 32.53 percent of total assets as on Sep. 30, 2016, compared with 31.18 percent on Sep. 30, 2015. Debt to equity ratio was at 1.18 as on Sep. 30, 2016, up from 1.10 as on Sep. 30, 2015.

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