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VOL. 36 | NO. 43 | Friday, October 26, 2012
US Steel 3Q profit doubles despite revenue drop
The Associated Press
U.S Steel doubled its third-quarter net income as a tax benefit helped balance pressure from price decreases and a challenging global economy.
The Pittsburgh manufacturer said Tuesday that it earned $44 million, or 28 cents per share, in the quarter that ended Sept. 30. That compares with $22 million, or 15 cents per share, a year ago.
Revenue fell more than 8 percent to $4.65 billion.
The steel maker recorded a $27 million tax benefit in this year's quarter, compared to a $33 million charge last year. A drop in the company's cost of sales and some other expenses also helped its performance this year.
There was also an after-tax charge of $22 million in the recently concluded quarter for employee lump sum payments tied to a new labor agreement.
U.S. Steel Corp. makes steel for a number of end uses from cars to building construction. The pace of economic growth can be gauged in part from the sales that it makes to its broad customer base.
Steel manufacturers have wrestled with anemic demand for much of the year because key customers such as the construction industry have cut purchases.
The company said Tuesday the economic environment proved more challenging in the third quarter than the quarter before it. A drop in average realized prices caused results from its flat-rolled segment to decrease quarter over quarter.
Globally, manufacturing has been weak as the economies of the U.S., China and some emerging countries grew more slowly, and Europe's debt problems have put some countries into recession. Meanwhile, new production at U.S. steel plants, along with imports, have created plentiful supplies.
And on Tuesday, Japan said its industrial output contracted by 4.1 percent in September from August and 8.1 percent from a year earlier as automakers and steel mills cut production due to shrinking demand, but also a confrontation with China.
All trading has been suspended for a second day on the New York Stock Exchange because of Hurricane Sandy.