United States Steel Corp. said Tuesday its loss widened in the first quarter as it took a $399 million charge for the sale of its Serbian manufacturing plant.
The Pittsburgh manufacturing giant lost $219 million, or $1.52 per share, for the first three months of the year. That compares with a loss of $86 million, or 60 cents per share, a year ago. Revenue rose 6.3 percent to $5.17 billion.
Excluding the loss from the sale of U.S. Steel Serbia and other items, the company earned 67 cents per share. Analysts, who exclude special items, expected earnings of 44 cents per share on revenue of $4.94 billion, according to FactSet.
The steel industry can offer a glimpse of how the economy is faring because it sells products to a broad range of customers, including automobile, mining and heavy equipment manufacturers and energy companies.
Flat-rolled and tubular steel sold at higher prices. Flat-rolled steel is used in cars and trucks. The U.S. auto industry is selling cars and trucks at the best pace in five years. Tubular steel is used for pipes, so demand is up in the U.S. because of an increase in drilling for oil.
U.S. Steel said steel shipments fell by 3 percent in the quarter because of weakness in Europe, where mounting government debts have stalled economic growth in many nations.
The company sold its money-losing Serbian steelworks plant in January to the Serbian government for $1. U.S. Steel wanted to exit the business without laying off its 5,400 workers. U.S. Steel bought the plant for $33 million in 2003.
Chairman and CEO John P. Surma said he expects European steel prices to increase in the second quarter. U.S. Steel's tubular steel business should see similar operating results to the first quarter, but its flat-rolled steel business is expected to face higher maintenance costs.
Last week, Nucor Corp. reported a drop in first-quarter net income after shipments of steel declined slightly and prices didn't improve until the last month of the quarter.
U.S. Steel shares added 31 cents to $28.53 in premarket trading.