U.S. Steel yesterday reported stronger-than-expected fourth-quarter profits and record results for all of 2008, but said weak demand and falling prices would result in a first-quarter loss.
Fourth-quarter profits totaled $308 million, or $2.65 per diluted share, vs. $35 million, or 29 cents per diluted share, in the year-ago quarter. They were substantially below third-quarter profits of $919 million, or $7.79 per diluted share. Sales of $4.57 billion were comparable to fourth-quarter 2007 results while shipments declined 29 percent to 4.2 million tons.
For all of 2008, the steelmaker earned $2.13 billion, or $18.11 per diluted share, on sales of $23.82 billion, vs. earnings of $879 million, or $7.40 per diluted share, and sales of $16.87 billion in 2007.
"We do not know when conditions may improve, but we are well positioned to fully participate in a market recovery when it occurs," Chairman and Chief Executive Officer John P. Surma said.
U.S. Steel has idled more than 4,000 workers because of the severe slowdown. Mr. Surma said the company "will take additional actions as market conditions warrant."
The steelmaker also said it would pay a first-quarter dividend of 30 cents per share, maintaining the current rate.
Contributing to U.S. Steel's dim first-quarter outlook are higher benefit costs. The company said it expected to spend about $360 million next year on pensions and other benefit plans, up from $227 million last year.
Pension-related charges triggered a fourth-quarter loss of $430.6 million, or $3.88 per diluted share, at AK Steel. Excluding the noncash charges of $699.5 million, the West Chester, Ohio, steelmaker said it earned a pretax profit of $600,000 for the quarter.
AK Steel also is forecasting an operating loss for the first quarter. The company said it would idle its Middletown, Ohio, blast furnace in early March for 45 days to perform maintenance while market conditions are weak.
Len Boselovic can be reached at email@example.com or 412-263-1941.