US Steel Corp. reports strong profits for 2006

US Steel Corp, the largest US-based steelmaker, has reported a rise in 2006 fourth quarter and full-year earnings compared to the previous year due to higher prices for its key products. The Pittsburgh-based company announced Wednesday that net earnings for the fourth quarter of 2006 totaled $297 million, or $2.50 per share, more than doubling net earnings of $109 million, or $0.85 per share, during the fourth quarter of 2005. Full-year net income was $1.37 billion, the company's highest annual total ever. Net sales for the fourth quarter of 2006 totaled $3.77 billion compared to $3.47 billion for the corresponding period of 2005, largely due to the 63 percent growth in European sales. However, earnings and revenues decreased from the third quarter due to reduced shipments, high import volumes, and high inventories in the fourth quarter. Looking towards the future, US Steel CEO John Surma warned that results will slip further in the first quarter of the current year. “We expect first-quarter results to decline from the fourth quarter, but flat rolled demand is firming and we have restarted several domestic blast furnaces to bring our production in line with improving order rates," Mr. Surma said in a statement. The company predicts that flat rolled shipments will increase in the first quarter compared to the fourth quarter of 2006, and that higher contract prices will offset lower spot prices. However, tubular shipments and prices may slide, as import levels and customer inventories are still high.