United States Steel Corp. posted another loss in the second quarter because of sluggish demand, and declines in flat-rolled shipments and line pipe prices.
The Pittsburgh-based steelmaker reported a second quarter loss of $78 million, or 54 cents per diluted share, compared to a first quarter loss of $73 million, or 51 cents per share. The company cited a lockout at one of its Canadian mills and a tough global economy.
Sales dropped about 4 percent to $4.4 billion in the second quarter.
ArcelorMittal will report its second-quarter earnings later this week and forecasts increased revenue. Southern steel giant Nucor, which has a bar mill depot in Hammond, turned a profit of $85.1 million, or 27 cents per diluted share in the second quarter, but saw both sales and earnings decline.
U.S. Steel lost $73 million on net sales of $4.6 billion in the first quarter this year. The company, which has facilities in Gary, East Chicago and Portage, had expected a slight decline in second-quarter shipments and another operating loss in its flat-rolled segment.
"Total reportable segment and other business operating results of $47 million reflect the effects of the ongoing lockout at our Lake Erie Works and a deceleration in global economic growth during the quarter" said John Surma, chairman and CEO. "Our plants operated well even with increased repairs and maintenance costs."
The steel industry currently faces challenging conditions, since anemic demand and overcapacity have resulted in low prices that make it hard to turn a profit, said steel analyst Charles Bradford, head of New York-based Bradford Research Inc. Demand from the construction industry has been depressed, and steelmakers that run large integrated mills such as U.S. Steel's Gary Works or ArcelorMittal Indiana Harbor still have high input costs.
A group of about 30 analysts who regularly follow ArcelorMittal expect the world's largest steelmaker to report $1.7 billion in second quarter earnings before interest, taxes, depreciation and amortization, or EBITDA. That's about 29 percent less than the company's $2.4 billion in earnings before expenses in the second quarter of 2012.
The Luxembourg-based steelmaker brought in $1.57 billion in earnings before expenses in the first quarter, posting a net loss of $345 million. ArcelorMittal made about the same amount of revenue as it did in the fourth quarter of 2012, but reported a much larger $3.9 billion loss because of one-time restructuring costs related to closing or idling plants in Europe.
Locally, the company has operations in Burns Harbor, East Chicago, Gary and Riverdale, and a joint venture in New Carlisle.
ArcelorMittal forecasted that earnings before expenses would improve in the second quarter and hit $7.1 billion for the year, if iron ore prices and the margin of steel prices over raw material costs stay at 2012 levels. The company has predicted its steel shipments will increase by 2 percent this year, and iron ore shipments will rise by 20 percent.
The company is scheduled to report its second quarter financial results on Thursday.