Oct 28 United States Steel Corp swung to a third-quarter loss as the steel-maker took an after-tax goodwill impairment charge related to a writedown in the value of two of its North American units.
The Pittsburgh-based steelmaker took a goodwill impairment charge of $1.8 billion, or $12.24 per diluted share, as it was hurt by a prolonged slump in steel prices due to overcapacity and a weak global economy.
Shares of the company fell about 5 percent after the bell from the $23.42 close in the regular session Monday on the New York stock Exchange.
Chief Executive Mario Longhi said that fourth quarter operating income will decrease due to planned maintenance outages in the company's flat-rolled segment. The steelmaker's European segment, however, is expected to return to profitability from a loss of $32 million in the current quarter, helped by higher shipments and lower maintenance costs.
The net loss was $1.80 billion, or $12.38 per share, for the third quarter ended Sept. 30, from a profit of $44.4 million, or 28 cents per share, a year earlier.
U.S. Steel had warned earlier this month that the goodwill impairment charge - $1 billion at its North American flat-rolled unit and $800 million at its Texas operations - would lead to a big third-quarter loss.
On an operating basis, the company posted a loss of 14 cents per share.
Revenue fell more than 11 percent to $4.13 billion.
Analysts on average were expecting the steelmaker to report a loss of 43 cents per share on revenue of $4.32 billion.
Income from the steelmaker's flat-rolled segment, by far its biggest unit by shipments, rose to $82 million from $29 million, a year earlier.
A lockout shut down raw steel production at U.S. Steel's Lake Erie works in Nanticoke, Ontario, over the summer. About 1,000 workers were locked out on April 28.
They voted to accept a new contract in September, and the company said then that they would start returning to work within days. It can take weeks or months to restart a blast furnace.
It was the third lockout at a former Stelco facility since U.S. Steel acquired the Canadian company in 2007.