United States Steel Corp. is one of the latest steelmakers to report improved financial results as steel demand and prices increase.
The Pittsburgh-based manufacturer said on April 27 that it expects to post a profit in the second quarter as losses narrowed to $157 million, or $1.10 per share, compared with a $439 million, or $4.78-per-share loss during the year-earlier period. Revenue increased to $3.9 billion from $2.75 billion in the year-ago quarter.
"We reported a significantly reduced overall loss in first-quarter 2010 as compared to fourth-quarter 2009 mainly due to improving business conditions and a strong operating performance for our flat-rolled segment," Chairman and CEO John Surma said. "In Europe, we returned to profitability and our tubular segment had another strong quarter."
At A Glance
United States Corp.
Primary Industry: Fabricated Metal Products
Number of Employees: 43,000
2008 In Review
Revenue: $23.75 billion
Profit Margin: 8.89%
Sales Turnover: 1.48
Inventory Turnover: 8.27
Revenue Growth: 40.78%
Return On Assets: 13.51%
Return On Equity: 38.19%
The flat-rolled segment, which provides steel for industries such as the automotive, appliance and construction sectors, benefited from higher prices, increased shipments and operating efficiencies, the company said. Shipments increased 12% to 3.6 million net tons and average realized prices rose to $654 per net ton, an increase of $21 per ton from the year-earlier period.
The company's flat-rolled segment operated at 94% of available raw steel capability during the quarter.
U.S. Steel's European operations realized shipment increases of 22%.
Decreased inventories in key markets, such as the auto industry and service centers, should help the company return to profitability in the second quarter, Surma said.
"We anticipate being profitable in all three of our operating segments in the second quarter of 2010 as gradually improving business conditions should be reflected in our operating results, most notably for our flat-rolled segment," Surma said. "We continue to experience healthy order rates from most of our end markets, resulting in increased production levels."
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