Armco Inc., the Parsippany, N.J.-based stainless steelmaker with an operation in Baltimore, lost $8.5 million in the fourth quarter, or 12 cents a share, compared to a profit of $15.5 million, or 15 cents a share, in the 1989 fourth quarter.
Sales during the fourth quarter were $414 million, a 5.3 percent drop from the previous fourth quarter when sales were $416.2 million.
For the year, the company lost $89.5 million, or $1.10 per share, compared to a net income of $165 million, or $1.78 per share, for 1989. Last year's loss included unusual items that reduced income by $86.1 million. About $56 million of this amount was for claims steming from lawsuits against the company and $30 million was put into reserves to cover possible claims against Armco's discontinued re-insurance operation.
Sales for the year were $1.7 billion, a 28.4 percent drop from 1989 sales of $2.4 billion.
"While weak overall results were anticipated for the first half of the year, the second half proved to be worse than expected as the economy continued toward recession," said Robert L. Purdum, chairman and chief executive.
Purdum does not expect this year to be any easier. "All Armco operations are focusing on reducing costs, improving productivity and conserving cash," he said in a prepared statement. "Eliminating the dividend on the common stock a week ago, though difficult for the shareholders in the short-term, was necessary to help conserve cash," Purdum said.
The Armco operation on Biddle Street, Baltimore Specialty Steels Corp., makes stainless bar rod and wire. In that portion of its business, Armco had an operating loss of $6.8 million on sales of $68 million in the fourth quarter compared to a operating loss of $2 million on sales of $73.2 million in the 1989 fourth quarter.
Last week Armco announced that it has an agreement in principle with Cyclops Industries Inc., to acquire that stainless steel company for $22 a share or approximately $156 million.
Cyclops owns Eastern Stainless Corp., which makes stainless plate at a plant on Rolling Mill Road.