Chief Executive Officer Thomas Usher will step down from that post in September but continue as chairman through April 2007, the company announced yesterday. John Surma, U.S. Steel's president and chief operating officer, will succeed Usher as CEO.
"I felt John was able to step up to the table, and the board felt John was ready, and John felt he was ready," Usher said in a conference call to industry analysts from St. Louis, where the company held its annual meeting.
Surma, who turns 50 next month, assumes his new post Oct. 1. Usher, who will turn 62 on Sept. 11., said in his role as nonexecutive chairman he'd work with Surma on strategic initiatives and organizational development. The company disclosed in a 2003 proxy statement that Usher planned to retire in 2007 and serve as consultant to the company until 2009.
Usher said he was handing over the CEO reins to Surma at a point when U.S. Steel is experiencing "a period of relative calm" and seeing improved results.
Earlier yesterday, the company posted its first quarterly profit in five quarters. First-quarter net income was $58 million, or 47 cents a share, on revenue of $2.96 billion, compared with last year's first-quarter loss of $38 million, or 40 cents per share, on revenue of $1.91 billion.
Excluding a change in accounting, net income was $44 million, or 36 cents per share, in line with Wall Street analysts' estimates.
The company benefited from increased demand, higher steel prices and a stronger economy, Surma told analysts.
Surma and Usher both said they expected continued price increases to significantly boost second-quarter results as well.
Usher became chairman and CEO of USX Corp. in 1995. At the beginning of 2002, the company split its steel and energy businesses into separate companies, and Usher continues to chair the energy unit, Marathon Oil Corp.
His career at U.S. Steel dates to 1965 when he joined the industrial engineering department at the Pittsburgh headquarters. From 1975 through 1979 he worked in the company's Chicago and Gary, Ind., operations before returning to headquarters, where he began a series of senior executive jobs.
Usher described his tenure as "a great, interesting time to be in the steel business," during which the company successfully split its steel and energy businesses, negotiated a long-term contract with the United Steelworkers of America and expanded its global reach with acquisitions in Slovakia and Serbia. Last year it acquired bankrupt National Steel Corp.
Surma, an accountant by training who launched his career at U.S. Steel's accountant, PriceWaterhouse, joined Marathon Oil in 1997 as a senior vice president. He became assistant to the chairman of USX in 2001 and was named vice chairman and chief financial officer of U.S. Steel when the new company was created in 2002.
Despite the promising quarterly earnings, shares in U.S. Steel yesterday fell $2.12, or nearly 6 percent, to close at $33.38. Some analysts said investors were disappointed with the results in comparison to better-than-expected performances by other steelmakers, including Nucor Corp. and AK Steel Holding Corp.
Joyce Gannon can be reached at email@example.com or 412-263-1580.