Hamilton workers continue to be locked out as US STEEL profits jump in 2 quarter

U.S. Steel has reported a sharp jump in second quarter profits.
Late Monday the company released its second quarter results showing net income of $222 million, a sharp turnaround from losses of $86 million in the first quarter of this year and $25 million in the second quarter of last year.

In a news release, company CEO John Surma said, “Our operating results improved significantly from the first quarter, driven primarily by higher average realized prices and stable raw materials costs in our flat-rolled segment. U.S. Steel Europe segment results were slightly lower, reflecting significantly lower shipments and capacity utilization and increased raw materials costs, partially offset by higher average realized prices. Tubular segment results were in line with the first quarter of 2011.”
The company reported second quarter income from operations of $300 million, compared to a loss from operations of $91 million in the first quarter of 2011 and income from operations of $198 million in the second quarter of 2010.

The flat-rolled segment, which includes the company’s operations in Hamilton and Nanticoke, led the recovery, posting income from operations of $374 million compared to a first quarter loss of $36 million and a second quarter profit of $111 million last year.
The company said flat-rolled income from operations improved to $95 per tonne from the first quarter, driven largely by an $83-per-tonne increase in average prices. The company also reported it spent another $40 million to keep the Hamilton plant’s coke ovens operating despite locking out unionized employees since last November.

Raw steel capability utilization rate in the second quarter was 81 per cent for the flat-rolled segment and 90 per cent for the company as a whole, excluding the Hamilton Works.
Year-to-date results show a profit of $209 million compared to a profit of $141 million for the first six months of 2010.

Looking ahead, Surma said in a news release the company expects lower results for the third quarter, reflecting the continued uneven economic recovery in the U.S.
“The United States and Europe continue to face an uneven economic recovery. The continuing fiscal uncertainty in the U.S. and Europe is not helping the situation,” he said. “Reflecting the effects of a slowing economy, we expect to report an overall lower operating profit in the third quarter; however, we expect significant improvement in our tubular operating income compared to the second quarter of 2011.”
The company added flat-rolled results for the third quarter are expected to decline reflecting lower prices because of rising capacity and imports.
Surma is to explain the company’s results to industry analysts in a conference call set for Tuesday afternoon.

THE SPEC 
sarnold@thespec.com