* Adjusted EPS $0.23 vs est. breakeven
* Revenue falls 8 pct to $4.7 bln
By Swetha Gopinath
Oct 30 U.S. Steel Corp, the top steel
producer in the United States by volume, warned that its current
quarter would be hurt by the global slowdown, joining rivals
Nucor Inc and AK Steel Holding Corp in
forecasting weak results.
Steel prices have plummeted in recent months as a result of
weak demand in China, the world's largest producer and consumer.
"Our results are expected to reflect continued weakness in
the European and emerging market economies, as well as economic
uncertainty in North America," Chief Executive John Surma said
in a statement.
U.S. Steel said it expects fourth-quarter results to decline
in its flat-rolled and tubular businesses in the Americas and
The World Steel Association expects steel consumption to
rise just 2.1 percent this year, compared with 6.2 percent
growth last year.
U.S. Steel expects operating results to break even in the
current quarter, compared with an income of $171 million in the
The company, however, said new spot orders, slated for
delivery later this quarter, were getting higher prices, with
market conditions improving in North America.
"There is potential for the market to recover between
December and February driven by increased seasonal demand but
trends seem fairly anemic," said CRT Capital Group analyst Kuni
Chen, who expects steel prices to average $680 per ton in 2013,
compared with $655 this year.
The company forecast a loss in its flat-rolled business due
to lower shipments and prices, and higher operating costs.
U.S. Steel plans to complete maintenance projects on several
North American blast furnaces in the current quarter and expects
maintenance and outage costs to be about $25 million higher than
the third quarter, CEO Surma said on a conference call with
The company said profit in its tubular business, which
caters to the oil and gas industry, would slide from the third
quarter due to decreasing drilling activity.
U.S. Steel said it expects its Slovakia-based European
business results to break even.
The company has bid on U.S. and Brazilian steel mills, owned
by Germany's biggest steelmaker ThyssenKrupp, Reuters
Members of labor union United Steelworkers in September
ratified a contract with U.S. Steel that gives 16,000 workers at
the company's U.S. facilities up to a 4.5 percent increase in
wages over the next three years.
The company said a $2,000 per employee lump sum payment made
earlier this month under the new contract led to a $35 million
pre-tax charge in the third-quarter.
Under the agreement, a lump sum of $500 per employee will be
payable in the second quarter of 2014, Chief Financial Officer
Gretchen Haggerty said on the conference call.
THIRD-QUARTER NET PROFIT DOUBLES
Net profit doubled to $44 million, or 28 cents per share, in
the third quarter, from $22 million, or 15 cents per share, a
Revenue fell 8 percent to $4.7 billion, while selling costs
fell about 6 percent.
Adjusted profit was 23 cents a share, while analysts'
expected the company to break even per share, according to
Thomson Reuters I/B/E/S.
The Pittsburgh-based company said total shipments slipped 4
percent in the third quarter to 5.3 million tons.
The stock, which has fallen 24 percent this year, closed at
$21.15 on Friday on the New York Stock Exchange. Major U.S.
stock markets were closed on Monday and Tuesday due to Hurricane