US Steel reports net loss for Q3; plans to idle three furnaces in Q4
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America's largest steelmaker by sales, United States Steel Corporation (US Steel), reported its third consecutive quarterly loss on Tuesday, though the firm cited improvements in shipment volumes and operating rates compared to the previous quarter.
Pittsburgh, Pennsylvania-based US Steel reported a third quarter 2009 net loss of $303 million, compared to a net loss of $392 million in the second quarter of 2009 and net income of $919 million in the third quarter of 2008. Third quarter steel shipments totaled 4.2 million net tons, an increase of 41 percent from the second quarter, while net sales totaled $2.8 billion in Q3, up 32 percent from Q2 and down from sales of $7.312 billion in the third quarter of 2008.
Of its three main business segments, Flat-rolled, US Steel Europe, and Tubular, US Steel's Flat-rolled segment posted the biggest operating loss in Q3, losing the company a total of $370 million. In Q2, this segment recorded a net loss of $362 million.
Commenting on results, US Steel chairman and CEO John P. Surma said, "Shipment volumes and operating rates for all of our reportable segments increased significantly from the very low levels of the second quarter as we brought several idled facilities online to satisfy increased customer order rates. Our European and Tubular segments had improved financial performance and our Flat-rolled segment's results were in line with the prior quarter despite the effects of continued low operating rates and facility restart costs."
Commenting on the company's outlook for the fourth quarter and beyond, Surma said, "We expect improvement in our overall fourth quarter results mainly as a result of increased demand for Flat-rolled products in North America, driven primarily by automotive markets and continued strength in tin mill markets. However, we expect to report an overall operating loss in the fourth quarter due primarily to continued low operating rates and idled facility carrying costs for our Flat-rolled and Tubular segments."
Surma went on to say that while end-user demand for flat rolled has decreased from the fourth quarter partly due to seasonal slowdowns, the firm will continue to adjust production to meet demand. Specifically, during the fourth quarter the company expects to idle the #14 Blast Furnace at its Gary Works for necessary repairs, as well as one of two furnaces at Granite City Works. Surma said that as a result, US Steel currently expects fourth quarter raw steel capability utilization rates to be in line with third quarter levels.