Steam billows from a stack at the U.S. Steel Canada plant, formerly Stelco, in Hamilton, March 4, 2009.Reuters
U.S. Steel Corp. posted a wider-than-expected quarterly loss, hurt by falling steel prices and weak demand in Europe, but it said it expects improvement in the first quarter.
The company said it has sold its Serbian operations to the Belgrade government to avoid further losses in European operations, but said it said it expects "significantly improved" first-quarter operating results as it sees higher selling prices and shipments of its flat-rolled steel.
The net loss in the fourth quarter was $226-million (U.S.), or $1.57 per share, compared with a net loss of 249-million, or $1.74 per share, a year earlier, the Pittsburgh-based company said on Tuesday.
Excluding $51-million of net currency losses, the adjusted loss was $1.14. On that basis the loss was bigger than the 86-cent loss per share analysts were expecting, according to Thomson Reuters I/B/E/S.
Sales rose to $4.8-billion, from $4.3-billion in the 2010 quarter.
The loss contrasted with profits in the second and third quarters of 2011 before steel prices started slumping, but it was the company's fifth loss in two years as the steel industry struggles to recover from the recession.
"We expect to report a significant improvement in our operating results in the first quarter as compared to the fourth quarter, mainly driven by improved average realized prices and shipments for our flat-rolled segment," Chief Executive Officer John Surma said in a statement.
However, he said the European business will still be hurt by the difficult economic environment.
U.S. Steel said it sold one of its two European businesses, U.S. Steel Serbia, to the government of Serbia for a nominal purchase price.
U.S. Steel said it expects to record a total non-cash charge of between $400-million and $450-million in the first quarter, which includes the loss on the sale and a charge of about $50-million to recognize currency translation adjustments related to the company's net investment in Serbia.
U.S. Steel stock was up 2 per cent at $29.30 in premarket trading on the New York Stock Exchange.