US Steel taking $1.8 billion writedown
The US' largest steel producer – the United States Steel Corporation (NYSE:X) – will write down $1.8 billion worth of assets this quarter, the company announced Friday afternoon.
The total goodwill impairment charge relates to its North American flat-rolled and Texas Operations segments.
US Steel assured investors that the non-cash write-down "will not affect the company's liquidity or compliance with debt covenants."
There is no tax benefit related to the impairment.
North American flat-rolled reporting unit's charge of $1 billion "is primarily driven by the valuation effects of the protracted economic recovery and excess global steelmaking capacity," the company noted in a press release.
Meanwhile, an oversupply of welded tubular products in the U.S. market drove down prices for Texas Operations which took the remaining $800 million hit.
US Steel shares ended Friday with a 1.35% boost but were down 0.5% – $23.86 – in after-hours trading. Year-to-date the company has lost 8.6%.