NEW YORK (Reuters) - United States Steel Corp. (X.N) on Monday posted a better-than-expected quarterly profit, reversing a year-earlier loss, helped by federal tariffs on imports and strong demand from the auto industry.þþDomestic steel prices soared this year, in part because President Bush imposed tariffs on a range of imports in an effort to prop up the ailing industry. Prices also got a lift from a falloff in U.S. capacity after a string of industry bankruptcies, partly due to the burdens of retiree health-care and pension costs.þþU.S. Steel, the largest domestic steelmaker, and the rest of the industry still face some of the same headaches behind the collapse of more than 30 steel companies since 1997. Later this year, U.S. Steel may have to take a $750 million charge against equity to account for possible shortfalls in its union employee pension plan.þþAlso, partly because of early nonunion retirements, the company said it must take a charge of about $100 million before taxes in the fourth quarter. It is estimating its pension expenses will rise by $15 million from third-quarter levels for that period.þþBut HSBC analyst Peter Bures said the charge has already been priced in by stock market investors, who drove the company's stock down 41 percent during the third quarter.þþ``The worst of that aspect is behind them,'' Bures said.þþBankrupt Bethlehem Steel Corp. (BHMSQ.PK), which reported a narrower quarterly loss on Monday, said it may take a $1.5 billion charge to help cover underfunded pension and retiree healthcare costs at year-end. It said it would have reported a profit had it not been for its pension expense. þþOUTLOOK GOODþþU.S. Steel shares slipped 14 cents to $12.69 on the New York Stock Exchange after Monday's earnings release, which showed the benefit of a nearly 60 percent increase in steel prices from a year before.þþThe company, based in Pittsburgh, reported earnings of $106 million, or $1.04 a share, including special items, compared with a loss of $23 million, or 26 cents a share, a year earlier.þþRevenue rose 16 percent to $1.91 billion from $1.66 billion.þþU.S. Steel said prices for flat-rolled steel, used in the production of cars and appliances such as washing machines, should rise further this quarter. But it cautioned that shipments could slide in the coming months since customers appear to be concentrating on keeping inventories low.þþHSBC's Bures and other analysts believe inventories will need to be rebuilt soon, however, particularly if steel prices begin to stabilize.þþ``Next year will definitely be better than this year even if the pricing comes down,'' said HSBC's Bures. ``Restocking at the auto service centers and among steel users will support demand for at least the next four quarters.''þþDuring the third-quarter, U.S. Steel recorded a $3 million gain for a tax refund. Excluding that item, its profit rose to $1.00 a share, well ahead of the 64 cents a share analysts had forecast.þþEstimates had ranged from 45 cents a share to 75 cents a share, according to research firm Thomson First Call. þþ
Source: NY Times
