U.S. Steel Corp. posted a wider loss and reported a 34% revenue decline as the steel market remained “significantly challenging.”
The company said cost-cutting efforts have partly offset depressed volumes and low prices in tubular and flat-rolled markets and the effect of imports.
U.S. Steel expects market conditions to improve in the second half of the year as supply chain inventories rebalance, primarily in flat-rolled markets.
The company reported a loss of $261 million, or $1.79 a share, compared with a loss of $18 million, or 12 cents a share, a year earlier.
The latest quarter included a write-down of 93 cents a share of its retained interest in U.S. Steel Canada, which applied for bankruptcy protection in late 2014.
The loss excluding items was 79 cents a share.
Net sales fell to $2.9 billion from $4.4 billion.
Analysts polled by Thomson Reuters projected a loss of 65 cents a share on revenue of $3.04 billion.
In April, U.S. Steel lowered its pretax 2015 earnings forecast, citing “massive” amounts of imports, low oil prices and excess inventories. The company said at the time it expected adjusted earnings before interest and taxes of between $115 million and $315 million, from a prior projection of between $550 million and $850 million. The company said Tuesday it continues to expect results within this range.
Across the board, steelmakers in the U.S. are reeling as prices have dropped to their lowest levels since the 2009 financial crisis.
A sharp decline in oil prices has led to a pullback by energy producers and lower demand for steel pipe for drilling.
Under Chief Executive Mario Longhi, who took over in 2013, U.S. Steel has been aggressive about laying off workers and cutting costs.
Source: The Wall Steet Journal
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