The Stel Salaried Pensioners Organization wishes to thank The Hamilton Spectator for permission to post the following article published in the October 30, 2007 edition
U.S. Steel 3Q profit drops about 35 per cent
on lower prices, shipments
PITTSBURGH - United States Steel Corp.,
which is paying US$1.1 billion for Canadian steelmaker Stelco Inc. (TSX:STE),
said Tuesday its third-quarter profit fell about 35 per cent with results hurt
by lower prices, shipments and costs related to raw materials and a recent
acquisition.
The Pittsburgh-based steel maker said net
income for the three months ended Sept. 30 fell to US$269 million, or $2.27 per
share, from $417 million, or $3.42 per share, a year earlier.
The results fell short of Wall Street
expectations.
U.S. Steel's acquisition of Hamilton-based
Stelco will make it the world's fifth-largest steel producer and strengthen its
position as a supplier to the North American automotive industry.
The sale of Stelco follows earlier purchases
by foreign companies of all the major Canadian steel producers - from
Hamilton-based Dofasco and Algoma of Sault Ste. Marie, Ont., to Ipsco, with
large operations in Regina.
At US Steel, the quarter included a
$27-million pretax charge related to inventory acquired with welded pipe maker
Lone Star Technologies Inc. and a tax provision with charges totaling $11
million. The charges cut earnings by $28 million, or 23 cents per share.
Shares of the company fell about $6.03, or
5.4 per cent, to US$106.47 a share in Tuesday trading on the New York Stock
Exchange.
U.S. Steel bought back 285,000 shares of its
stock for $28 million in the quarter.
Sales grew about six per cent to $4.35
billion, from $4.11 billion during the same period last year.
The results missed analyst expectations for
profit of $2.63 per share on $4.38 billion in revenue, according to Thomson
Financial. Those estimates typically exclude one-time items.
"We expect a decline in overall results
for the fourth quarter mainly due to normal seasonal effects and several
scheduled blast furnace outages," John Surma, U.S. Steel's chairman and
chief executive, said in a statement.
North American flat-rolled steel inventories
and imports are at relatively low levels, he said, and the weaker U.S. dollar
should favor the company's customers over time.
European steel consumption remained healthy,
but high imports - particularly from China - and high service center
inventories are adding pressure to prices and orders, he said.