Analysts saw little to cheer about in Bethlehem Steel Corp.'s just-released third quarter results, but seemed willing to blame tough market conditions for the steelmaker's sharp drop in earnings.
The Bethlehem, Pa.-based steelmaker yesterday posted a profit of $10 million, or 5 cents a share, for the quarter, a fraction of the $47 million, or 53 cents a share, it earned during the same period last year. Sales of $1.2 billion were down nearly 5 percent from a year ago.
The company blamed the decline on a drop in sales and prices for steel and on higher operating costs. On the cost side, the modernization of a hot strip mill at Sparrows Point resulted in a 25-day outage of the unit, and the acceleration of repairs of a coke oven proved expensive.
Bethlehem employs about 7,500 workers at its steel plant and shipyard at Sparrows Point.
"We weren't expecting anything more than a modest profit so we weren't surprised," said Micheal M. Via, director of research for Anderson & Strudwick of Richmond, Va.
The nickel per-share profit pales in comparison to the strong quarters of last year, but reflects sour economic conditions affecting all steelmakers, he said.
"Things don't look great but they don't look that awful either. Unless there is a drastic occurance in the economy, I don't see much improvement in the next four quarters," Via said.
Despite the drop in profit, the company continues to invest heavily in its plants and equipment, which reduces profit but positions it well for the future, Via said. "They are much more concerned about the long run that they have been in 20 years," he said.
John Hilton, an analyst with Argus Research in New York, said the results were in line with other steelmakers. "Our outlook is for the future to get a little worse," Hilton said.
Bethlehem stock closed yesterday at 11 3/8 , up 1/4 .
The results give the company a profit of $53 million for the first nine months of the year, less than a third of the $196 million it had at this time last year. Those 1989 figures had been depressed by a $105 million special charge designed to cover a restructuring of the Sparrows Point shipyard and other operations.