US Steel swings to 2Q loss of $78 million

AP News
Posted: Jul 29, 2013 6:59 PM

PITTSBURGH (AP) — US Steel Corp. on Monday posted a smaller loss than expected in the second quarter but gave a cautious forecast for the July-to-September period.

Chairman and CEO John Surma said results were affected by an ongoing lockout at its Lake Erie Works in Ontario and a slowing in global economic growth during the quarter.

Steel makers are struggling as the weak global economy fails to produce enough demand for their products, and U.S. producers face price competition from imports.

US Steel said after the market closed that it lost $78 million, or 54 cents per share, in the second quarter. A year ago, it earned net income of $101 million, or 62 cents per share.

Still, the loss was less than the 80 cents per share that was expected by analysts, according to a FactSet survey.

Revenue dropped 12 percent to $4.43 billion and fell short of analysts' forecast of $4.58 billion.

Surma said the company's flat-rolled and tubular steel segments are expected to do better in the third quarter but that its European division will fare worse because of a planned outage at a blast furnace. Overall, operating results "are expected to be comparable to the second quarter," he said in a statement.

A loss similar to the second quarter's would be wider than the loss of 20 cents per share that analysts expect.

Company executives were scheduled to discuss the second-quarter results in a conference call with analysts on Tuesday.

In June, Standard & Poor's cuts its rating on US Steel one notch deeper into junk-bond territory, to "BB-" from "BB," but assigned a "stable" outlook to the credit in the belief that the company has enough cash to cushion itself from a prolonged weak market.

The shares rose 4 cents in regular trading to close at $18.98. They started the after-hours session by rising to $19.77 before dropping to $18.84, down 14 cents.