NEW YORK U.S.
Steel Corp. swung to a $78-million net loss in the second
quarter due to decreased flat-rolled shipments, particularly
from the lockout at its Lake Erie operations in Nanticoke,
Ontario, along with falling line pipe prices.
"Results for our
flat-rolled and tubular segments are projected to improve
compared to the second quarter; however, we expect lower
results from our European segment due to a planned blast
furnace outage in the third quarter," John Surma, chairman and
chief executive officer of the Pittsburgh-based company, said
in a statement July 29.
The loss was bigger
than the net loss of $73 million in the first three months of
this year and in contrast to net income of $101 million in the
second quarter of last year. Second-quarter sales of $4.43
billion were down 3.6 percent from $4.6 billion in the first
quarter and 11.7 percent from $5.02 billion a year earlier.
Much of the sales
decline was attributable to lower shipments and increased
operating costs in U.S. Steels flat-rolled sector,
particularly due to repairs and maintenance costs about $30
million higher than in the first quarter at its Gary Works in
Indiana and its Lake Erie Works. The company also incurred a
$70-million charge in idle facility carrying costs at its
Hamilton and Lake Erie operations.
"We expect our
flat-rolled segment results from operations to improve based on
an increase in average realized prices, lower raw material
costs, and lower repairs and maintenance costs, partially
offset by reduced shipments," the company said.
Its tubular segment
results also were lower than in the first quarter due to lower
line pipe prices and continued "elevated" imports. However, the
company said it expects this segment to improve in the third
quarter due to an increase in supported anticipated drilling
activity and decreased operating costs thanks to efficiencies
related to higher production volumes.