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U.S. Steel Posts 2Q Loss, But Sales Double

Tue, 07/27/2010 - 4:46am

NEW YORK (AP) — United States Steel Corp. on Tuesday posted a second-quarter loss, although it was far smaller than a year ago as sales more than doubled.

The company said the results indicate "a sharp turnaround" from last year, but it sees some hurdles ahead. US Steel expects to post a third-quarter profit, but the Pittsburgh company said operating results will fall from the second quarter because of declines in orders from spot market customers.

Shares fell about 4 percent in premarket trading.

The company, which makes steel products for use in everything from appliances to cars, had a second-quarter loss of $25 million, or 17 cents per share. That compares with a loss of $392 million, or $2.92 per share, a year earlier.

Taking out the impact of the weakening euro against the U.S. dollar and some accounting charges, US Steel made 45 cents a share — well below the forecast of analysts polled by Thomson Reuters, who on average predicted profit of 63 cents per share.

Sales more than doubled to $4.68 billion. Analysts predicted $4.63 billion. Surging revenue was offset by higher operating expenses, which nearly doubled from a year earlier.

For the current quarter the company said lower shipping and production volumes for its flat-rolled segment, where it makes things ranging from stainless steel refrigerator doors to retail shelving systems, hurt results. Shipping and production are being dragged down by slower order rates, due to seasonal weakness and changes in inventory.

Steel prices have fallen in recent weeks because of diminishing demand.

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