U.S. Steel said yesterday that it had a second-quarter loss because of employee health care costs and that it would record a $500 million pretax charge in the second half for job cuts and additional retiree costs.þþThe net loss of $49 million, or 51 cents a share, is in contrast to net income a year earlier of $27 million, or 28 cents a share. Revenue climbed to $2.36 billion from $1.81 billion. þþShipments increased 25 percent, helped by the purchase in May of National Steel. Earnings continue to be hurt by the cost of employee and retiree benefits. Pension expenses, cheaper imports and weak demand have led 35 American steel companies to file for bankruptcy protection since 1997, according to the United Steelworkers of America union.þþÿThey are trying to get all those one-time costs behind them, and it's going to be a hefty charge,ÿ said Gene Pisasale, senior investment officer at Wilmington Trust, which owns U.S. Steel shares. ÿThey're taking them all at once. I see that as the best way to do it.ÿþþU.S. Steel had $52 million in health care costs last quarter related to the sale of its coal mining business. Without those costs it would have had a profit of $3 million, or a loss of 1 cent a share after paying preferred-stock dividends. The average estimate of five analysts surveyed by Thomson First Call was for a 6-cent loss.þþShares of U.S. Steel rose 73 cents, or 4.7 percent, to $16.31. They have risen 24 percent this year.þþU.S. Steel bought National Steel out of bankruptcy protection in May for $817 million in cash and assumed $540 million in liabilities. Under U.S. Steel's agreement with National Steel workers, the company is eliminating about 20 percent of the work force, or about 5,700 jobs.þþ
Source: NY Times
