U.S. Steel (X - Analyst Report) has announced three primary strategic actions which will aid in its transformation and also updated its third-quarter 2014 guidance.

The company has decided to drop the previously planned expansion of its iron ore pellet operations at Keetac in Keewatin, MN. The expansion would have raised the facility's production by 3.6 million tons annually to 9.6 million tons. However, the essential permits for the expansion will expire in Sep 2014 and will not be renewed.

U.S. Steel also stated that it will not proceed with further development and construction of the carbon alloy facilities at Gary Works in Gary, IN. The project included building of two modules, of which, one has already been constructed and will be idled permanently while the other will not be built anymore.

The company estimated capital investment of more than $800 million to complete the two projects. It expects that these two strategic actions will result in non-cash, pre-tax charge of about $250 million in the third quarter. While taking these decisions the company considered the raw materials requirements for iron ore and coke and found that its current production capability is sufficient.

The company noted that the amount saved through these actions will be redirected to other projects such as developing advanced high strength steel for the automotive and energy industries as well as to update and modernize its operations.

U.S. Steel also announced that its Canadian subsidiary, U.S. Steel Canada Inc., has registered a loss from operations of about $2.4 billion or more than $16.00 per share in each of the past five years and will be dropped from the former’s financial statements. U.S. Steel Canada will then file for creditor protection under Canada's Companies' Creditors Arrangement Act (CCAA). U. S. Steel will provide U. S. Steel Canada with C$185 million (roughly $165 million) of secured debtor-in-possession financing to support current operations through end-2015, so that the latter can continue operating and serving its customers.

As a result of these three strategic moves, U.S. Steel expects to incur non-cash, pretax charge in the range of $550 million and $600 million. The company expects third-quarter adjusted results, excluding items, to be significantly higher than the current consensus earnings per share estimates, based on stable steel market conditions in the U.S. and improved operational performance. The company also expects a significant improvement in operating income for its reportable segments and Other Businesses in the third quarter.

U.S. Steel currently holds a Zacks Rank #1 (Strong Buy).