Bethlehem, Armco report big 1990 losses

January 31, 1991|By Kim Clark

Two steelmakers with Baltimore operations reported large losses yesterday.

Bethlehem Steel Corp., which has 6,700 workers at its Sparrows Point steel mills, said it made an operating profit in 1990 but took a $550 million charge to restructure its troubled home plant in Bethlehem, Pa. That gave Bethlehem a net loss of $517 million, or $6.91 a share, for the fourth quarter and a loss of $464 million, or $6.45 a share, for the year.

Industry analysts said Bethlehem's operating earnings and sales were better than expected, however. Despite the continuing recession and weakening steel prices, Bethlehem's sales rose slightly, to $1.2 billion, in the fourth quarter.

And, despite costly repairs to the Baltimore works, the company said it would have earned $33 million in the fourth quarter without the extraordinary restructuring charge. In the same period of 1989, the company earned $50 million, or 57 cents a share.

In the earnings announcement, Bethlehem Chairman Walter F. Williams said that orders for steel dropped late in the fourth quarter and that the "outlook for 1991 is very uncertain."

But R. Wayne Atwell, who follows the steel industry for Goldman Sachs and Co. in New York, said orders have picked up in January, perhaps because steel buyers are preparing for a possible strike at USX Corp., the nation's biggest steel company, after a midnight contract deadline tomorrow.

Armco Inc., which has a 900-worker stainless-steel plant on East Biddle Street, said yesterday that it lost $8.5 million, or 12 cents a share, in the fourth quarter and nearly $90 million, or $1.10 a share, in 1990.

In 1989, the maker of specialty steel products earned $15.5 million in the fourth quarter and $165 million for the year.

But for most of those two years, the company said, it lost money at its Baltimore plant.

Orders for the bars, rods and wire made at Armco's Baltimore and Kansas City plants have fallen off. The entire division had an operating loss of $6.8 million on sales of $68 million in the fourth quarter of 1990. The division had higher sales and lost $2 million in the year-ago period.

For all of 1990, the bar, rod and wire division had an operating loss of $13.6 million on sales of $289.3 million, compared with an operating loss of $300,000 on sales of $349.1 million in 1989.

Both Armco and Bethlehem recently announced wide-ranging restructuring plans.

Armco, based in Parsippany, N.J., announced early this month that it would merge with Cyclops Industries Inc., a Pittsburgh-based maker of stainless steel with a plant in Baltimore.

Bethlehem announced last week a $550 million charge for a joint venture with British Steel Corp.

Bethlehem said the joint venture would eliminate steelmaking operations at the company's Bethlehem, Pa.-based construction and rail mills and could mean as many as 2,000 layoffs.

The British Steel joint venture is not expected to affect the company's operations in Baltimore.

But Bethlehem is negotiating with the United Steelworkers union to restructure the company's troubled bar, rod and wire division, which has several hundred employees in Baltimore.

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