U.S. Steel Group Reports Drop in Earnings - 55% Decline -

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Jan 25, 2000 - 06:40 PM

U.S. Steel Group Reports Drop in Earnings

The Associated Press

PITTSBURGH (AP) - Blaming a decline in steel prices due to overseas competition, USX-U.S. Steel Group reported a 55 percent decline in earnings in the fourth quarter of 1999.

Without adjusting for nonrecurring items, net income was $34 million, or 35 cents a share, compared to $76 million, or 81 cents a share, in the fourth quarter in 1998, USX reported Monday. Adjusting for those items - including a higher-than-expected foreign tax assessment - net income for the fourth quarter was $39 million, or 42 cents per share.

Fourth quarter sales rose 7.7 percent to $1.46 billion from $1.36 billion in the same quarter a year ago, the company reported.

Analysts had predicted 43 cents per share in the quarter, according to Zack's Investment Research. Consensus analyst estimates from First Call was 41 cents a share.

"More or less, it was in line with expectations," said Richard Aldrich, an analyst with Lehman Brothers. "It looks like, if you back out the nonrecurring items, they would break even in the steel segment, which was a little bit worse than expected."

USX Corp. board chairman Thomas J. Usher noted that operating rates improved and shipments increased more than 20 percent in the fourth quarter.

Shipments for the fourth quarter were 2.86 million net tons, up 22 percent from 1998.

Raw steel capability utilization in the fourth quarter was 97 percent, up significantly from 76 percent in 1998.

For the year, net income was $44 million, or 40 cents per share, down 88 percent from $364 million, or $3.92 per share, in 1998. But 1999 sales dropped 15.5 percent to $5.31 billion from $6.28 billion for all of 1998, the company said.

The 1999 figure does not take into account an after-tax charge of $39 million, or 44 cents per share, associated with USX's investment in USS/Kobe Steel Co. and costs related to the formation of Republic Technologies LLC. USX Corp. completed its purchase of Kobe Steel's 50 percent interest in Lorain Tubular Co. in Ohio late last year.

Shares of USX rose 31 1/4 cents to $26.50 in trading Tuesday at 5:15 p.m. on the New York Stock Exchange.

-- snooze button (alarmclock_2000@yahoo.com), January 26, 2000


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