WRAPUP 2-Carpenter, Olympic post qtrly losses; outlook positive

* Carpenter Q4 loss/shr $0.37 vs est loss $0.24/shr

* Sees Q1 loss; profitable fiscal 2010

* Sees higher non-cash pension expense in 2010

* Olympic Q4 loss/shr $0.22 vs est loss of $0.29 in 2008

* Olympic shares up 16 pct, Carpenter up 6 pct, (Adds conference call details, analyst's comment)

By Antonita Madonna Devotta

BANGALORE, July 30 (Reuters) - Plunging sales continued to weigh on Olympic Steel Inc (ZEUS.O) and Carpenter Technology Corp (CRS.N), which posted quarterly losses, but the steel companies expect results to improve in the coming quarters.

The steel industry, considered a broad gauge of an economy's strength, has seen demand for the metal tumble along with activity in the key automotive and construction sectors.

Cleveland Ohio-based Olympic, which posted a narrower-than-expected adjusted loss, said it was seeing stabilization in pricing.

In a conference call with analysts, the company said it was seeing a recovery in pricing for its plate products and that the extreme pressure on pricing seen in the second quarter has abated.

"We are seeing absorption of the price increases and we are seeing very little resistance to it," said the company, which acknowledged that plate was the largest of its three segments.

Olympic shares were up 16 percent at $25.32 Thursday afternoon on Nasdaq.

Shares of Carpenter, which posted a wider-than-expected loss, were also up 6 percent at $18.30 on the New York Stock Exchange, tracking the broader Dow Jones U.S. Iron & Steel Index which was up 4 percent.

Carpenter also expects to take advantage of improved debt conditions and renew its unsecured credit facility by the middle of fiscal 2010.

The company, which sees a rise of 83 cents a share in non-cash pension expense for 2010, said it has financial flexibility to continue paying dividends.

Steel mill utilization has also increased in the second quarter, powered by demand from India, China and Russia.

Olympic said it reduced inventory by 32 percent in the second quarter, topping its prior target of 25 percent for the period, and expects to continue to lower inventory through the third quarter.

"Earnings should improve during the year as volume improves, and based on current market expectations, we should finish the full year with positive earnings per share," said Carpenter Chief Executive Anne Stevens, who expects the company to post a loss in its current first quarter.

LATEST QUARTER RESULTS

In the fourth quarter, Carpenter posted a net loss of 48 cents a share, compared with a profit of 95 cents a share a year ago.

The company took a $7.3 million charge from the closure of its Crawley metal strip manufacturing facility, which it said will help reduce fixed costs and utilize existing production capacity more efficiently.

Carpenter's revenue for the quarter dropped 54 percent to $256.9 million.

For the second quarter, Olympic Steel posted a net loss of $33.8 million, or $3.11 a share, compared with a profit of $29.6 million, or $2.70 a share, a year ago.

The loss includes a $50.5 million pretax charge to write down the value of inventory as of June 30, the company said.

Olympic's second-quarter net sales declined 66 percent to $122.4 million. Tons sold in the second quarter of 2009 decreased 51 percent to 174,000 tons.

"We expect our results to improve in the second half of 2009, as prices have begun to increase, and the unprecedented inventory liquidation by service centers during the first half of 2009 appears to be ending," Olympic Chief Executive Michael Siegal said.

This marks some relief for the industry which has undergone a dramatic about-face since this time last year when worldwide steel prices shot up 50 percent, leaving companies with higher cost inventory amidst slumping demand.

FOCUS ON COST CUTS CONTINUE

"We will continue to focus on reducing costs in all areas, improving our manufacturing efficiencies and preparing for the market recovery when it comes," Carpenter's CEO said.

The company said it eliminated nearly all but essential overtime, terminated temporary workers in the second half of the year, and is focusing on cost performance on a weekly basis.

"We made significant improvements in rightsizing our balance sheet during the quarter, by reducing our inventory tons by 32 percent, maintaining a strong receivable turnover, and eliminating 64 percent or $57 million of our debt," Olympic's CEO said.

The company, which plans to eliminate its debt by the end of the year, also said it will not renew its Philadelphia warehouse lease that is set to expire this year.

"In the face of the economic realities, the companies are working very hard to keep their costs under control and to make sure their balance sheets have the maximum amount of liquidity," analyst Mark Parr of Keybanc Capital Markets said. (Additional reporting by Arundhati Ramanathan; Editing by Jarshad Kakkrakandy)