The steel industry, while continuing to improve somewhat, is still struggling to recover from economic difficulties. U.S. Steel (NYSE:X), the largest of the domestic steelmakers, has turned in a quarter that was hardly worth writing home about.
For the quarter, the company reported a net loss of $267 million, or $1.86 per share. Those figures compare with a loss of $303 million, or $2.11 per diluted share, in the previous year's quarter. Revenue for the company during the quarter declined to $3.35 billion, from $4.5 billion a year ago. In total sales for the year, the company was slightly surpassed by Nucor (NYSE:NUE), which chalked up $11.19 billion, versus U.S. Steel's $11.0 billion.
According to CEO John P. Surma, "We reported a modest improvement in fourth quarter results as compared to the third quarter, mainly due to higher average realized prices, increased shipments, and higher utilization rates for our Flat-rolled operations, primarily driven by North American automotive and service center markets, and the return to profitability of our Tubular operations."
Surma noted that orders from customers for the fourth quarter were improved from the third quarter. As a result, the flat-rolled segment improved its capacity utilization to 64%, from the 58% rate in the third quarter.
The state of the global steel market has resulted in a pullback by the company in its capital spending. Rather than an anticipated $740 million, the company spent about $470 million for the year.
Looking at the company's segments for the quarter, flat-rolled results were stronger than in the prior quarter, largely as a result of higher average prices and increased shipments. However, U.S. Steel Europe experienced slightly reduced results from the prior quarter as the unit continued to operate at or near breakeven results. At the same time, the tubular group returned to profitability, generating $39 million in income in the quarter, representing a major improvement from the previous quarter.
For the group as a whole, Nucor and AK Steel (NYSE:AKS) turned in solid quarters. Dow Chemical (NYSE:DOW) and Steel Dynamics (NASDAQ:STLD) will report next week, and Olympic Steel (NASDAQ:ZEUS) will also report next month. In the meantime, with regard to U.S. Steel, my specific inclination would be to give the company a substantial berth for now.
