United States Steel Corporation : U.S. Steel Loss Narrows on Flat-Rolled Unit Strength
01/29/2013| 09:06am US/Eastern
U.S. Steel Corp.'s (X) fourth-quarter loss narrowed as the steelmaker posted improvement in its flat-rolled and European segments, though revenue slipped.
For the current quarter, the company said it continues to be challenged by uncertain global economic and steel-market conditions, saying it expects slight improvement in the European and tubular segment operating results, with flat-rolled segment results expected to be near break-even.
U.S. Steel, the country's top steelmaker by production, returned to profitability in mid-2011 after nine quarters in the red thanks to a boom in North American oil and gas drilling, though bottom-line results since then have been inconsistent.
The company's European segment has recently rebounded, partially reflecting the sale of its loss-making Serbian unit last year to the Serbian government. The company's remaining European operations, located in Slovakia, have access to healthier Central European markets, the company has said, helping to shield it from the pressure on steelmakers in Southern and Western Europe.
U.S. Steel posted a loss of $50 million, or 35 cents a share, compared with a year-earlier loss of $211 million, or $1.46 a share. The latest quarter included a benefit of six cents a share from a favorable settlement related to a supplier contract dispute, while the year-ago quarter included 35 cents a share in net foreign-currency losses and eight cents a share in environmental-remediation charges.
Net sales fell 6.9% to $4.49 billion.
Analysts polled by Thomson Reuters most recently expected a loss of 75 cents a share on revenue of $4.35 billion.
Gross margin widened to 6% from 3.6%.
The tubular-steel segment's profit dropped 73% to $32 million.
The flat-rolled products segment swung to a profit of $11 million, compared with a year-earlier loss of $72 million.
The European division earned $7 million, compared with a loss of $89 million in the same period last year.
Shares rise 1.9% to $24.16 in premarket trading. The stock is up 12% in the past three months.
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