United States Steel Corp. became the latest American steel company to report a loss in the April-June quarter as the slumping economy continued to drag down the industry's biggest customers.
But domestic steelmakers are starting to see a rise in prices and orders as manufacturers and distributors replace their depleted stockpiles. Demand for products made from steel -- from cars to dishwashers -- remains week, however, and steel prices are well below record levels reached last summer.
On Tuesday, U.S. Steel -- which operates a plant in Granite City -- reported its second straight quarterly loss and said third-quarter results would remain in the red.
"Our order book and operating rates remained at very low levels, spot market prices declined, and we continued to incur carrying costs for our idled facilities," John Surma, the company's chief executive, said in a statement.
The Pittsburgh-based company lost $392 million, or $2.92 per share, for the three months through June 30. That compares with a profit of $668 million, or $5.65 per share, in the year-earlier period. A gain from foreign currency exchange narrowed the latest loss by $41 million, or 31 cents per share.
Quarterly revenue fell 68 percent to $2.13 billion.
Analysts surveyed by Thomson Reuters, on average, expected a loss of $3.45 per share on revenue of $2.39 billion. Those estimates generally exclude one-time items.
All three of U.S. Steel's business segments reported losses. But the losses were smaller than the first quarter at its European operations and North American flat-rolled business. Flat-rolled, or sheet steel, is used in autos and appliances.
Its tubular business -- which makes pipes used in oil and gas drilling -- reported a loss compared with a profit a year earlier.
The company expects steel production to rise from extremely low levels in the April-June period.
Higher orders indicate customers may be replenishing their stockpiles of steel in North America and Central Europe, Surma said. To meet the demand, U.S. Steel has begun to restart idled mills, including the Granite City plant, and raise prices in its flat-rolled and European businesses.
"Despite these signs of improvement, the outlook for overall demand remains uncertain and the timing and magnitude of sustained economic recovery remains difficult to forecast," he said.
U.S. Steel still sees each of its businesses posting an operating loss for the July-September period, Surma said.
The company has laid off thousands of workers and temporarily idled plants since late last year, when steel demand began plunging amid the credit crisis and economic slowdown.