U.S. Steel shares tumbled 6 percent Tuesday after the Pittsburgh steel producer reported a second-quarter loss and forecast weaker results for the third quarter.

The company lost $25 million, or 17 cents per diluted share, for the quarter, as foreign currency-related losses overwhelmed the improved performance of its mills in North America and Europe.

The company's North American sheet mills, European operations and tubular plants posted $198 million in operating profits vs. a $465 million operating loss in the year-ago quarter and a $57 million operating loss in the first quarter of this year.

Chairman and CEO John P. Surma said he expected lower operating profits in the third quarter. North American flat roll operations should operate near break-even levels due to lower production and shipments as well as higher costs for raw materials and energy, he said. European results should be comparable to the second quarter, while profits from its tubular mills should improve, he said.

"It's not clear to us what's happening in the market," Mr. Surma said during a conference call with analysts. "There's a recovery under way. It's going to be choppy."

U.S. Steel shares traded as low as $45 Tuesday before closing at $45.76, down $3.13. They are off 17 percent for the year.

The second-quarter loss was caused by restating the value of a $1.4 billion intercompany loan to its European operations to reflect the weaker euro. That reduced net income by $96 million, or 62 cents per diluted share.

Chief financial officer Gretchen Haggerty said the measurement was made at the end of the quarter. Since then, the euro has regained much of the ground it lost last quarter, she told analysts.

North American operations benefited from higher prices, healthy order rates, lower energy costs as well as higher operating rates in the second quarter, the company said. Its U.S. and Canadian mills operated at 82 percent capacity during the quarter, up from 73 percent in the first quarter and 32 percent in the year-ago quarter.

Sales doubled during the quarter to $4.68 billion and shipments also doubled to 5.9 million tons.

In last year's second quarter, U.S. Steel lost $392 million, or $2.92 per diluted share, on sales of $2.13 billion.

Mr. Surma said the company was using the proceeds from a $600 million debt offering in March to ramp up spending at its Clairton coke plant, where a $1 billion expansion plan announced in November 2007 had been stalled by the recession.

He also mentioned the July 14 explosion at the plant that injured 20 as well as an accident that seriously injured a worker at the company's Gary, Ind., mill this month.

"We are saddened and deeply troubled by these events," Mr. Surma told analysts. "We do not accept excuses like 'accidents happen' or 'it's a dangerous job.'"

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