Bethlehem Steel Corp. lost $39.2 million, or 60 cents a share, on sales of $1.05 billion in the first quarter, but analysts say things could be worse.
"Bethlehem's performance will compare favorably with the other integrated steel producers," said Richard Henderson, an analyst with Pershing & Co. in Jersey City, N.J.
Charles Bradford, an analyst with UBS Phillips & Drew in New York, calculated that the Bethlehem, Pa., company lost $13 a ton on the steel it produced. But Inland Steel Industries lost $55 a ton, and USX Corp. could report a loss as high $95 a ton, he noted.
"It's a terrible year for the steel industry," said Peter Anker, an analyst with First Boston in New York.
The steel industry is suffering from a slump in demand and higher operating costs. Bethlehem Steel also is spending money on renovating its plants in Baltimore County and Burns Harbor, Ind.
The loss it reported yesterday compares with a profit of $21 million, or 20 cents a share, on sales of $1.2 billion in the first quarter of 1990.
Including payments to holders of preferred stock, the net loss was $45.3 million, compared with a profit of $15 million after such payments in the year-ago quarter.
In the fourth quarter of 1990, the company posted a loss of $517 million, or $6.91 a share.
The company said it planned to issue a dividend announcement today. Bethlehem Steel has paid 10 cents a share for the last six quarters.
Steel operations, which include the Sparrows Point plant in Baltimore County, reported a loss of $26.3 million compared with income of $28.6 million in the first quarter of 1990, as the result of lower prices and a 7 percent decline in steel shipments.
At the same time, labor and iron ore costs increased.
Chairman Walter F. Williams said raw steel production was 67 percent of capability compared with 70 percent a year ago.
The 1991 rate would have been even lower except for the need to build inventories for a blast furnace renovation at the Burns Harbor plant and a planned 40-day outage of the Sparrows Point hot strip mill, which is being modernized.
The mill is to be closed in May and not resume full operation until July.
Henderson said Bethlehem Steel is taking the right approach in trying to upgrade its facilities. In focusing on its Sparrows Point and Burns Harbor plants, the company will become more profitable and improve its product mix, he said.
Improvements to Sparrows Point include a $200 million renovation of the hot-strip mill that was started in 1989, a $92 million project started a year ago to retool coke ovens to meet environmental standards and a new $150 million sheet-coating line, on which construction started earlier this month. The plant employs about 6,700 people.
Henderson also praised the company for negotiating with labor in an effort to make its Bar, Rod and Wire Division more profitable.
"Here you have a company working very hard to improve its competitive position," Henderson said. "By the end of 1992, they will have Sparrows Point and will also have Burns Harbor relined, and it should be a time when the economy is recovering."
The company is predicting another loss in the second quarter, and analysts said a loss in the third quarter also is likely. But the company could return to profitability as soon as the fourth quarter, Bradford said.