Eastern Stainless lost $2 million in 4th quarter

February 19, 1991|By Kim Clark

Eastern Stainless Steel, which is about to be merged into Armco Inc., said a drop in orders and the falling price of nickel contributed to a $2 million loss in the last three months of 1990, down from a $1.1 million profit in the last quarter of 1989.

Eastern, which is a subsidiary of Pittsburgh-based Cyclops Industries Inc., said orders for the plant's stainless steel sheets and plates in the last quarter of the year were only $42.9 million, 10 percent lower than the revenues for the same period of 1989.

Month-by-month figures show that sales fell off dramatically from October to December, said company spokesman Larry Lintner.

For the year, Eastern said its earnings fell from $14.9 million in 1989 to $1.2 million in 1990.

The company blamed the 1990 loss on the recession and on equipment problems and costs associated with the restarting of machines that roll out thin sheets of stainless steel.

Eastern, which has specialized in production of thick stainless steel plates used on battleships and in industrial kettles, had shut down the sheet machines since reorganizing under bankruptcy court protection in 1986.

Company President Robert Rubino said he believes sales have fallen because distributors have slashed their purchasing in order to keep their inventories low.

But since inventories are low, Eastern will benefit when the economy rebounds, he said.

Overall, Mr. Lintner said, the fall in the price of nickel, which makes up about 10 percent of the content of stainless steel, forced the company to write down about $1 million worth of inventory, or about half the quarterly loss.

Christopher Plummer, a steel industry analyst for the WEFA Group in Bala-Cynwyd, Pa., said nickel prices have fallen about $1 from last August's high of $5.05 a pound.

Earlier this month, Cyclops announced it would sell itself to Parsipanny, N.J.-based Armco, which owns a money-losing stainless steel rod plant on East Biddle Street.

Cyclops purchased Eastern in 1987.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.