United States Steel Corp. (NYSE:X)

Earnings (loss) before interest and income taxes

The earnings before interest and income taxes exhibited significant fluctuations over the observed periods. Beginning with a positive figure of 883 million USD in 2018, a sharp decline to 196 million USD occurred in 2019. This was followed by a substantial loss of 596 million USD in 2020, representing a considerable downturn. However, the segment experienced a robust recovery in 2021 with earnings surging to 2,630 million USD, before slightly declining to 1,951 million USD in 2022. Overall, the earnings demonstrate substantial volatility with a noteworthy rebound in the latter years.

Net sales

Net sales showed a general downward trend between 2018 and 2020, decreasing from 9,912 million USD in 2018 to 7,279 million USD in 2020. This decline corresponds with the period of earnings loss. Sales then increased markedly in 2021, reaching 12,358 million USD, and continued to improve slightly to 12,872 million USD in 2022. This indicates a recovery in demand or pricing power contributing to the improved financial performance after 2020.

Segment profit margin

The segment profit margin reflects the profitability relative to sales and follows a pattern consistent with earnings and sales trends. Initially, the margin was 8.91% in 2018, which plummeted to 2.05% in 2019 and turned negative at -8.19% in 2020. A significant improvement occurred in 2021, with the margin rising sharply to 21.28%, before decreasing to 15.16% in 2022. Despite the decline in 2022, the margin remained strong, indicating efficient cost management or favorable market conditions compared to the earlier years.

Earnings Before Interest and Income Taxes

The reported earnings before interest and income taxes in the final two periods show a significant decline, decreasing from 1,206 million US dollars in the period ending December 31, 2021, to 481 million US dollars by December 31, 2022. This represents a decrease of approximately 60%, indicating a substantial reduction in operating profitability within the segment.

Net Sales

Net sales similarly displayed a downward trend, falling from 3,516 million US dollars in the period ending December 31, 2021, to 3,047 million US dollars by December 31, 2022. This equates to a reduction of about 13%, which may have contributed to the decrease in earnings observed in the same timeframe.

Segment Profit Margin

The segment profit margin experienced a notable contraction, dropping from 34.3% in December 31, 2021, to 15.79% by December 31, 2022. This decline suggests that the segment's profitability per unit of sales has diminished significantly, reflecting either increased costs, reduced selling prices, or both.

The financial data reveals fluctuations in the earnings before interest and income taxes over the five-year period, with a notable decline from 2018 to 2019, followed by a slight recovery in 2020, a substantial increase in 2021, and a decrease again in 2022. Specifically, earnings dropped from a positive 359 million US dollars in 2018 to a negative 57 million in 2019, then slightly improved to 9 million in 2020, surged significantly to 975 million in 2021, and finally decreased to 444 million in 2022.

Net sales display a downward trend between 2018 and 2020, decreasing from 3,228 million US dollars in 2018 to 1,970 million in 2020. However, there was a marked recovery in 2021, reaching 4,266 million, which was maintained close to that level in 2022 at 4,256 million.

The segment profit margin correlates with earnings and net sales patterns. It declined from a healthy 11.12% in 2018 to a negative margin of -2.36% in 2019, slightly improved to 0.46% in 2020, peaked significantly at 22.86% in 2021, and then receded to 10.43% in 2022.

Summary of Trends

The period from 2018 through 2020 was characterized by declining financial performance, with reduced earnings and net sales accompanied by a negative profit margin in 2019 and minimal margin in 2020.

In 2021, there was a strong recovery across all metrics, highlighted by a nearly tenfold increase in earnings before interest and income taxes, a doubling of net sales compared to 2020, and a significant increase in segment profit margin to over 22%.

Although 2022 showed some decline from the peak levels of 2021 in earnings and profit margin, the net sales remained relatively stable, indicating sustained revenue generation despite reduced profitability.

The volatility in these financial metrics suggests sensitivity to market conditions or operational factors affecting profitability and sales volumes during this timeframe.

An analysis of the financial performance of the Tubular Products segment over the five-year period reveals significant volatility and a marked turnaround in the most recent years.

Earnings (Loss) Before Interest and Income Taxes

The segment experienced consistent losses from 2018 through 2020, with the magnitude of the loss increasing each year. Specifically, losses grew from $58 million in 2018 to a substantial $179 million in 2020. However, the segment achieved a notable shift in 2021, posting a small positive earnings figure of $1 million, followed by a substantial increase to $544 million in 2022. This represents a dramatic improvement in profitability and a clear reversal from prior negative trends.

Net Sales

Net sales showed a declining trend from 2018 to 2020, falling from $1,236 million to $646 million. A partial recovery is evident in 2021, when sales increased to $809 million, followed by a strong rebound in 2022 to $1,616 million, surpassing all prior years. The sales trajectory indicates a contraction in the first three years, likely contributing to the segment's losses, with a subsequent significant expansion in sales volume or price realization in the last two years.

Segment Profit Margin

The profit margin metric closely mirrors the earning trends, with negative margins during the loss-making years, becoming increasingly negative up to -27.71% in 2020. This severely negative margin underscores the operational challenges during that period. A positive margin first emerged in 2021 at 0.12%, moving sharply higher to 33.66% in 2022. This improvement reflects enhanced profitability and operational efficiency, as well as likely benefits from increased sales and better cost management.

Overall, the segment faced significant challenges and deteriorating profitability through 2020, aligned with declining sales. However, the turnaround beginning in 2021 and continuing into 2022 is remarkable, with substantial increases in both sales and earnings accompanied by a shift from negative to strongly positive profit margins. This suggests effective strategic or operational adjustments that have renewed the segment's financial health and competitive position.

Earnings (loss) before interest and income taxes

The earnings before interest and income taxes exhibited significant volatility over the five-year period. There was a marked decline from 883 million US$ in 2018 to 196 million US$ in 2019, followed by a substantial loss of 596 million US$ in 2020. The subsequent years showed a strong recovery, with earnings rising sharply to 2,630 million US$ in 2021 before declining somewhat to 1,951 million US$ in 2022. This pattern suggests that the segment faced considerable challenges in 2019 and 2020 but rebounded strongly thereafter.

Total assets

Total assets in this segment demonstrated a generally upward trend throughout the period. Starting at 6,977 million US$ in 2018, assets increased modestly to 7,267 million US$ in 2019, then experienced a slight decrease to 7,099 million US$ in 2020. From 2020 onward, assets consistently grew, reaching 7,337 million US$ in 2021 and further increasing to 7,936 million US$ in 2022. This overall growth indicates ongoing investment or asset accumulation within the segment.

Segment Return on Assets (ROA)

The segment ROA exhibited considerable fluctuation, mirroring the trend observed in earnings. Initially strong at 12.66% in 2018, it declined sharply to 2.7% in 2019 and further to a negative 8.4% in 2020, reflecting the loss reported that year. The ROA surged dramatically in 2021 to 35.85%, indicating exceptional profitability relative to assets, before decreasing to 24.58% in 2022. Despite the decline in 2022, the ROA remained significantly above pre-2020 levels, highlighting improved asset efficiency in recent years.

Earnings (loss) before interest and income taxes

The earnings before interest and income taxes increased from 1,206 million US dollars in 2021 to 481 million US dollars in 2022. This represents a significant decline in profitability within the segment over the one-year period.

Total assets

Total assets expanded from 4,715 million US dollars in 2021 to 5,787 million US dollars in 2022. This indicates an increase in the asset base of the segment during the same period.

Segment Return on Assets (ROA)

The segment ROA decreased sharply from 25.58% in 2021 to 8.31% in 2022. This decline suggests that the segment's efficiency in generating earnings from its assets deteriorated notably between these two years.

Overall, despite the growth in total assets, the segment experienced a marked reduction in both profitability and asset utilization effectiveness from 2021 to 2022. The decreased earnings before interest and income taxes coupled with a lower ROA indicate challenges in maintaining operational profitability relative to the asset base during this period.

Over the five-year period analyzed, the segment's earnings before interest and income taxes exhibited notable volatility. Initially, there was a positive earnings amount of 359 million US dollars in 2018, followed by a significant decline to a loss of 57 million in 2019. The segment then showed a marginal recovery to 9 million in 2020. A substantial improvement occurred in 2021, with earnings rising sharply to 975 million, more than doubling the initial level from 2018. However, in 2022, earnings decreased to 444 million, indicating a decline from the peak but still maintaining a positive performance relative to the earlier years.

Total assets demonstrated moderate fluctuations throughout the period. Starting at 5607 million US dollars in 2018, assets decreased slightly to 5360 million in 2019 and then increased marginally to 5502 million in 2020. A stronger increase was observed in 2021, reaching 6111 million, followed by a reduction to 5823 million in 2022. Despite these variations, asset levels remained relatively stable over the five-year span.

The Segment Return on Assets (ROA) further confirms the earnings trend with significant variability. The ROA was positive at 6.4% in 2018 but turned negative in 2019, reflecting the loss recorded that year. It returned to a low positive figure of 0.16% in 2020, before dramatically increasing to 15.95% in 2021, the highest within the period. By 2022, ROA declined to 7.62%, remaining above the levels observed prior to 2021, thereby indicating a stronger profitability relative to asset base despite the downturn from the previous year.

Overall, the segment experienced a challenging phase during 2019 and 2020 with negative and minimal earnings, respectively, but displayed a pronounced recovery in 2021. The decline in 2022 suggests some volatility remains, though performance stayed favorable compared to the lows in 2019 and 2020. Asset levels showed moderate changes, not always in tandem with earnings variations, suggesting other factors may have influenced asset management during these years.

The "Tubular Products" segment exhibited marked fluctuations over the five-year period from 2018 to 2022. A significant negative earnings pattern was observed from 2018 through 2020, with losses deepening markedly in 2020, where earnings before interest and income taxes reached their lowest point. However, a sharp reversal occurred in 2021, transitioning to a positive earnings figure, which substantially increased in 2022, indicating a notable improvement in operational profitability.

Total assets within the segment showed some variability but remained relatively stable across the period. There was a slight increase overall, with the asset base peaking in 2019, declining in 2020, and subsequently rising again through 2021 and 2022.

The segment return on assets (ROA) mirrored the earnings trend closely. Initially negative and worsening to a significant low in 2020, the ROA approached zero in 2021 and then surged dramatically by 2022, reflecting the enhanced efficiency and profitability of asset utilization in the latter years.

Earnings Trend

Persistently negative from 2018 to 2020, with an escalating loss culminating in 2020. A pronounced turnaround occurred in 2021, followed by substantial positive earnings growth in 2022.

Asset Base

Relatively stable with minor fluctuations, showing a peak in 2019, a dip in 2020, and recovery thereafter, ending with the highest asset level in 2022.

Segment Return on Assets (ROA)

Consistently negative in the initial years with a significant decline in 2020. ROA rebounded sharply in 2021 and achieved a strong positive position by 2022, indicating improved asset performance and profitability.

Overall, the data reveals that the segment faced significant operational and financial challenges up to 2020 but successfully improved profitability and asset utilization in the subsequent two years, culminating in a robust financial position by the end of 2022.

The analysis of the North American Flat-Rolled segment data reveals several noteworthy trends over the five-year period from 2018 to 2022.

Net Sales

Net sales demonstrated a fluctuating pattern, initially declining from 9,912 million USD in 2018 to 7,279 million USD in 2020, representing a significant decrease over two years. This decline could indicate challenges in market demand or other operational factors during that period. However, a recovery trend began in 2021, with net sales increasing sharply to 12,358 million USD and continuing to rise to 12,872 million USD in 2022, surpassing pre-decline levels. This rebound suggests improved market conditions, increased demand, or successful strategic initiatives to boost sales.

Total Assets

Total assets showed moderate growth over the period but with less volatility compared to net sales. From 6,977 million USD in 2018, total assets increased steadily to reach 7,936 million USD in 2022. The asset base remained relatively stable between 2018 and 2021, fluctuating slightly between 6,977 and 7,337 million USD. The gradual increase in 2022 indicates continued investment or accumulation of assets, potentially supporting the growth in net sales observed in the same year.

Segment Asset Turnover

The segment asset turnover ratio, which measures the efficiency of asset utilization to generate sales, showed a downward trend initially, decreasing from 1.42 in 2018 to 1.03 in 2020. This decline aligns with the drop in net sales and suggests lower efficiency or underutilization of assets during that period. A significant improvement occurred in 2021, with the ratio rising sharply to 1.68, indicating enhanced operational efficiency and better asset management amidst rising sales. The ratio slightly declined to 1.62 in 2022 but remained substantially higher than in the earlier years, reflecting a sustained improvement in asset productivity.

Overall, the segment experienced a challenging period during 2019-2020, with declines in sales and asset turnover. Recovery and growth phases in 2021 and 2022 were marked by increased sales and improved asset utilization, supported by a stable and gradually growing asset base. These trends highlight operational improvements and potentially strengthened market positioning in recent years.

Net Sales

Net sales decreased from 3,516 million US dollars in 2021 to 3,047 million US dollars in 2022, indicating a decline in revenue from the prior year.

Total Assets

Total assets increased significantly from 4,715 million US dollars in 2021 to 5,787 million US dollars in 2022. This suggests an expansion in the asset base of the segment.

Segment Asset Turnover

The segment asset turnover ratio declined from 0.75 in 2021 to 0.53 in 2022. This decrease implies reduced efficiency in generating sales from the segment’s assets during this period.

Overall Observations

The data reveals a simultaneous increase in total assets and decrease in net sales, contributing to a lower asset turnover ratio. This combination points to a potential underutilization of assets or challenges in converting asset investments into proportional revenue growth in the reported year.

Net Sales

Net sales exhibited significant fluctuations over the five-year period. There was a declining trend from 2018 to 2020, with values decreasing from 3,228 million USD in 2018 to 1,970 million USD in 2020. This was followed by a strong recovery in 2021, with net sales more than doubling to 4,266 million USD, and then slightly decreasing but remaining stable at 4,256 million USD in 2022.

Total Assets

Total assets showed relatively minor changes compared to net sales. Starting at 5,607 million USD in 2018, assets decreased slightly to 5,360 million USD in 2019. There was a marginal increase to 5,502 million USD in 2020, followed by a more pronounced rise to 6,111 million USD in 2021. In 2022, total assets declined somewhat to 5,823 million USD but remained higher than the initial years.

Segment Asset Turnover

The segment asset turnover ratio mirrored the trends of net sales relative to total assets, reflecting changes in asset efficiency. Beginning at 0.58 in 2018, the ratio declined consistently over two years to a low of 0.36 in 2020. This indicates reduced efficiency in utilizing assets to generate sales during that period. However, the ratio sharply improved in 2021 to 0.70 and increased slightly to 0.73 in 2022, demonstrating enhanced asset utilization aligned with the recovery in net sales.

The analysis of the annual data for the “Tubular Products” reportable segment reveals several notable trends over the five-year period.

Net Sales

Net sales exhibited a downward trend from 2018 to 2020, declining significantly from 1,236 million US dollars in 2018 to 646 million US dollars in 2020. This was followed by a moderate recovery in 2021 to 809 million US dollars and a substantial increase in 2022, reaching 1,616 million US dollars, the highest value within the period. This pattern indicates a sharp contraction in sales during 2020, with a strong rebound and growth in subsequent years.

Total Assets

Total assets maintained a relatively stable range between 2018 and 2022. The value decreased from 1,076 million US dollars in 2018 to 887 million US dollars in 2020, mirroring the sales decline. Subsequently, total assets increased moderately to 1,054 million US dollars in 2021 and further to 1,140 million US dollars in 2022. Although fluctuations are present, the asset base in 2022 remains somewhat higher than the initial value in 2018.

Segment Asset Turnover

The segment asset turnover ratio experienced a downward trend from 1.15 in 2018 to 0.73 in 2020, reflecting a reduced efficiency in utilizing assets to generate sales during the period of declining net sales. This ratio slightly improved to 0.77 in 2021 and dramatically increased to 1.42 in 2022, indicating enhanced asset utilization coinciding with the significant sales growth. The 2022 ratio surpasses the levels seen at the beginning of the period, suggesting improved operational performance.

In summary, the segment faced challenges in 2020 with sharp declines in net sales and asset efficiency, which were followed by a recovery phase in 2021 and a robust expansion in 2022. The growth in net sales, coupled with increased asset turnover, suggests improved market conditions or operational effectiveness in the most recent year. The total assets remained generally stable, supporting the rebound in sales and asset turnover.

The analysis of the annual data for the North American Flat-Rolled segment over the five-year period reveals several key trends in capital expenditures, depreciation, and the relationship between the two.

Capital expenditures

There is a noticeable decline from 2018 through 2021, starting at $820 million and decreasing to $422 million in 2021. This represents a reduction of nearly 49% over four years. However, in 2022, capital expenditures increased modestly to $503 million, suggesting a potential shift or adjustment in investment strategy after a period of lower spending.

Depreciation, depletion, and amortization

These expenses show a steady increase from $367 million in 2018 to $499 million in 2022. The consistent upward trend indicates growing wear and usage of assets, or possibly increasing capital asset bases from prior years, reflecting continuing allocation of asset costs over time.

Segment capital expenditures to depreciation ratio

The ratio steadily declines from 2.23 in 2018 to a low of 0.86 in 2021, which is under one, indicating that capital expenditures were less than depreciation expenses, implying potential underinvestment relative to asset consumption. In 2022, the ratio slightly recovers to 1.01, reaching just above parity. This suggests that capital expenditure levels have started to align more closely with the rate of asset depreciation, potentially aiming to maintain or replace the asset base more effectively.

Overall, the segment experienced a period of curtailed capital investment relative to asset depreciation until 2021, which may have implications for asset renewal and future operational capacity. The uptick in capital expenditures and ratio in 2022 could reflect strategic adjustments to address these concerns and support ongoing business operations.

Capital expenditures

Capital expenditures increased significantly over the period shown, starting from an unspecified amount in the earlier years to US$331 million in 2021 and then rising sharply to US$1,159 million in 2022. This marks a substantial investment growth, indicating a possible expansion or modernization effort within the segment.

Depreciation, depletion & amortization

This expense category remained relatively stable with a slight increase, registering US$151 million in 2021 and US$158 million in 2022. The modest growth suggests a consistent level of asset depreciation reflective of ongoing asset use and wear without dramatic fluctuations.

Segment capital expenditures to depreciation ratio

The ratio of capital expenditures to depreciation experienced a notable rise from 2.19 in 2021 to 7.34 in 2022. This indicates that capital investments significantly outpaced depreciation expenses in 2022, pointing to a period of increased investment relative to asset aging or consumption. This trend aligns with the sharp increase in capital expenditures during the same period.

Capital Expenditures

Capital expenditures demonstrated variability over the reviewed period, starting at 104 million US dollars in 2018, peaking at 153 million in 2019, then declining sharply to a low of 57 million in 2021, before rising again to 90 million in 2022. This pattern suggests fluctuating investment levels in the segment’s assets, with a notable reduction during the middle years followed by a moderate recovery.

Depreciation, Depletion & Amortization

This expense item showed a generally stable trend with a slight increase from 87 million US dollars in 2018 to 98 million in 2021, then a decrease to 85 million in 2022. The stability in these charges implies a relatively consistent consumption of capital assets, with a minor tapering off in the most recent year.

Segment Capital Expenditures to Depreciation Ratio

The ratio of capital expenditures to depreciation fluctuated significantly, beginning at 1.2 in 2018 and reaching its highest point at 1.66 in 2019. It then declined sharply to 0.81 in 2020 and further to 0.58 in 2021, indicating capital expenditures were substantially lower relative to asset consumption during this period. In 2022, the ratio recovered to 1.06, suggesting renewed investment activity that more closely matched the depreciation levels.

Overall Insights

The data reveal an investment cycle marked by heightened expenditure in 2019 followed by a period of restraint in 2020 and 2021. Despite a drop in capital spending in these years, depreciation charges remained relatively steady, possibly reflecting aging assets and limited reinvestment. The rebound in capital expenditures and the corresponding increase in the expenditure-to-depreciation ratio in 2022 may indicate a strategic emphasis on asset renewal or expansion initiatives going forward.

Capital expenditures

Capital expenditures for the segment exhibited significant fluctuations over the five-year period. Starting at $45 million in 2018, there was a pronounced increase to $145 million in 2019, followed by a further rise to $159 million in 2020. However, expenditures sharply declined in the subsequent years, falling to $51 million in 2021 and further down to $17 million in 2022. This pattern indicates an initial phase of substantial investment, which tapered off considerably in the final two years.

Depreciation, depletion & amortization

The depreciation, depletion, and amortization expense showed relative stability throughout the period, with minor variation around the mid to high 40s in millions. Beginning at $47 million in 2018, it experienced a slight decrease to $46 million in 2019, dropped to $39 million in 2020, and then recovered to $46 million in 2021 and $48 million in 2022. This stable trend suggests consistent asset utilization and amortization policies despite the changing capital expenditures.

Segment capital expenditures to depreciation ratio

The ratio of segment capital expenditures to depreciation experienced marked changes reflecting the volatility in capital spending. In 2018, the ratio was below 1, at 0.96, indicating capital expenditures were roughly on par with depreciation. The ratio surged significantly in 2019 and 2020 to 3.15 and 4.08, respectively, highlighting aggressive investment levels well above asset depreciation. This ratio then sharply declined to 1.11 in 2021 and dropped further to 0.35 in 2022, underscoring a period of subdued investment compared to the asset base being depreciated.