USX-U.S. Steel Beats Forecasts, Says Has Turned Corner
{{#rendered}} {{/rendered}}No. 1 U.S. steelmaker USX-U.S. Steel Group on Monday said it posted a second-quarter loss versus a profit a year ago, hurt by the weak U.S. economy and its dampening effect on steel prices and demand.
U.S. Steel said it lost $30 million, or 36 cents per share, compared with a year-earlier profit of $66 million before charges, or 72 cents per share.
Results beat Wall Street analysts' estimates, which had ranged from a loss of 50 cents per share to a loss of 73 cents, with a mean estimate of a loss of 55 cents, according to research firm Thomson Financial/First Call.
{{#rendered}} {{/rendered}}``We believe conditions for our Domestic Steel operations have found the bottom of this steel cycle and that we have turned the corner,'' said Chairman Thomas Usher. The company expects ``somewhat higher'' volumes in the third quarter and flat to modestly-higher realized prices, he said.
USX Corp. restructured earlier this month into a holding company comprising U.S. Steel Group and USX-Marathon Group, both publicly traded firms.
Sales at U.S. Steel, which also produces tin products and coal, climbed to $1.74 billion from $1.65 billion.
{{#rendered}} {{/rendered}}The company's domestic steel shipments dropped 10 percent in the second quarter to $2.6 million net tons from $2.9 million net tons a year ago.
However, U.S. Steel's order book has strengthened and its prices have steadied since the second quarter, Usher said.
``While domestic commercial conditions remain difficult, demand and pricing appear to have bottomed out in the 2001 second quarter,'' he said.
{{#rendered}} {{/rendered}}U.S. Steel expects total shipments of about 14 million to 14.5 million net tons for the full year, and domestic steel shipments of 10.5 million to 11 million net tons.
Declines in natural gas prices have become evident, Usher said, and U.S. Steel cut its natural gas usage to 75 percent of the amount used in the second quarter last year, trimming costs further.