US Steel stock is trading at its lowest point in over three years after the troubled industrial group announced further cost-cutting plans and the departure of its Chief Financial Officer, Kevin Bradley.
US Steel Stock Struggling Against Industry Headwinds
United States Steel Corporation (NYSE:X) announced on Tuesday that it will implement an enhanced operating model and organizational structure from January 1 in order to accelerate the company’s strategic transformation. US Steel stock has been in decline for much of the last 18 months as the company contends with falling steel prices, a 25% tariff on steel imposed last year, and a larger than expected drop in scrap prices. The cost-cutting initiatives are expected to save approximately $200 million USD by 2022.
United States Steel’s cost-cutting plans come just days after the company announced a $700 million USD minority stake in Arkansas-based steel firm Big River Steel, with an option to wholly acquire the company in 2023 in a deal that could reach $2.35 billion USD. Big River currently operates the newest and most advanced flat-rolled mill in North America, which means the company will be at the center of US Steel’s adding market-leading, technologically advanced assets to create a “best of both” footprint. US Steel stock has dropped 15% since the deal was announced.
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“These initiatives reduce costs and more closely align US Steel’s corporate structure with the company’s previously announced strategic investments in leading technology and advanced manufacturing, including the recently announced purchase of a minority interest in Big River Steel, the newest and most advanced flat-rolled mini mill in North America, with a clear path to consolidation,” the company said in a statement. US Steel stock is down 8% to a three-year low of $10.13 following the announcement.
CFO Departure
In a separate statement yesterday, the company also announced the departure of CFO Kevin Bradley, who stayed on in an advisory role to assist the transition of incoming CFO Christine Breves. Breves will have to contend with a steel market that is only expected to get worse after the company issued a profit warning to investors, saying it expects to post a Q3 loss of $0.35 per share.
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