U.S. Steel's 2Q loss $78M; locked out Canadian workers to vote on pact
U.S. Steel Corp. reported a second-quarter loss of $78 million, blaming costs from a labor dispute that shutdown its Lake Erie Works in Canada, slower economic growth and increased repair and maintenance costs.
Sales for the three-month period fell to $4.43 billion versus $5.02 billion a year ago.
The loss in the April-to-June period equaled 54 cents a share and compared to net income of $101 million, or 62 cents a share, a year ago.
The Pittsburgh-based steelmaker said it had expenses of about $70 million at the Lake Erie operations in Nanticoke, Ontario, and at its sister plant in Hamilton, Ontario. About 1,000 workers were idled at the Lake Erie Works when a lockout began on April 28 after members of the United Steelworkers union rejected a contract offer.
Union members at the Lake Erie Works are scheduled to vote on new contract offer from the company on Wednesday. “If the contract is approved, we plan to restart operations as soon as possible,” CEO John P. Surma said.
Surma said U.S. Steel's plants “operated well even with increased repairs and maintenance costs.”
Repairs and maintenance costs in the second quarter were about $30 million higher than the first quarter because of projects at Gary Works and Lake Erie Works. Shipments decreased because of the maintenance projects and the Lake Erie Works lockout, the company said.
Results by business segment included a loss at the company's flat-rolled unit, and profits at its tubular business and at U.S. Steel Europe. It also had a $30 million profit from a real estate sale.
Surma said the flat-rolled segment's operating loss of $51 million resulted from increased costs from repairs and maintenance, higher natural gas costs and decreased shipments. That compared with operating profit of $177 million a year ago.
Operating profit at U.S. Steel Europe was $10 million, down from $38 million in the first quarter and $34 million in the second quarter of last year because of higher iron ore costs and lower prices.
The tubular segment had operating profit of $45 million, which was below the first-quarter profit of $64 million and year-ago profit of $103 million because of lower prices caused by imports.
Nine steel producers including U.S. Steel filed a trade case with government regulators on July 2, claiming 11 nations dumped oil and natural gas pipe products in the United States at below cost. The case will be the largest and most important in steel industry history, said analyst Michelle Applebaum in Chicago.
For the third quarter, Surma forecast improved results for the flat-rolled and tubular segments. But a blast furnace outage at the Great Lakes Works in Hamilton, the Lake Erie Works labor dispute, and a scheduled blast furnace outage in Europe will affect shipments. Tubular segment results are expected to improve because of anticipated drilling activity
John D. Oravecz is a staff writer for Trib Total Media. He can be reached at 412-320-7882 or email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Overhaul possible for West Mifflin’s Century III Mall
- Chevron settles fatal shale gas well fire lawsuit for $5M
- Google adds HBO access, mobile payment to next version of Android
- No end in sight for casino market saturation in northeastern U.S.
- Avago Technologies to pay $37 billion for chipmaker rival Broadcom
- Task force to plot ways of easing gas glut in Pennsylvania via pipelines
- Pitt study suggests health law attracting young to balance insurers’ risks
- Weak first-quarter economic report anticipated
- Asian sell-off, Greece uncertainty rattle Wall Street
- IRS cybersecurity breach touches lives of homebuyers, others
- Tight supply pushes home prices higher