Beth Steel, Armco report losses Producers see some hope, but customers say demand will fall

October 31, 1991|By Kim Clark

Two of Baltimore's biggest steelmakers lost money this summer, and their customers warned yesterday that prices and demand for steel are continuing to sag this fall.

Bethlehem Steel Corp. said yesterday that while sales were down slightly from last summer, the company lost nearly $61 million because of weak prices and high repair and labor costs.

Bethlehem, which employs more than 8,000 workers at its Sparrows Point operations, said it expects to lose money again in the fourth quarter.

And Armco Inc., owner of a 400-worker plant in East Baltimore, said it lost almost $27 million in the third quarter.

Though much of the news was bad, the two companies saw a few glimmers of hope.

Armco's chairman, Robert L. Purdum, said he was heartened because its Brazilian operations were no longer losing money and the company's operating profits were up for the quarter. Armco declared a quarterly loss because its share of a Japanese joint venture, Armco Steel Co. L.P., drained profits by nearly $32 million.

Bethlehem Chairman Walter Williams said steel demand had improved and that costly repairs to the Sparrows Point and Burns Harbor, Ind., steel plants were progressing, promising improved efficiencies next year. And a month-old, 5 percent price increase was "gaining acceptance in the marketplace," Mr. Williams said.

But some buyers said the big steelmakers were "whistling in the dark."

"The mills are cutting deals," said Dick Raynor, sales manager at Durrett-Sheppard Steel Co.

Mr. Raynor, whose service center sells steel to machine shops and other customers, said he believed the companies were trying to drum up business by talking about the possibility of additional price increases.

Bethlehem and Armco both said they were considering shutdowns or reforms of their bar rod and wire divisions, which make round products used in automobiles, ships and equipment. Both of those divisions have operations in Baltimore and have lost sales to less expensive products made by smaller, non-union mills.

Armco said it wants to sell or downsize its Baltimore Specialty Steels Corp. plant on East Biddle Street. The company also warned it might take a charge in a future quarter for restructuring of the plant.

Armco spokesman Lee Bland said yesterday that while the company had previously said it would also consider shutting down the plant, those plans have been put off because the local operations are now covering at least their operating costs.

The division has been able to stem the red ink by shutting down unprofitable operations, he said. Mr. Bland said the consolidations have reduced the Baltimore staff by about 200 workers.

Bethlehem Steel Corp.

Three months ended 9/30/91

Revenue ... ... ... ... ... ... Net ... ... ... ... ... ... Share

'91 1,121,000,000 .. .. ... .. (60,600,000) .. .. ... ... (0.88)

'90 1,208,200,000 .. .. ... .. 10,100,000 ... ... ... ... 0.05

% change ... -7.2 ... .. ... .. -- ... ... ... .. ... .. .. --

Nine months ended 9/30/91

Revenue ... ... ... ... ... ... Net ... ... ... ... ... ... Share

'91 3,292,200,000 .. .. ... .. (128,900,000) .. .. ... .. (1.94)

'90 3,698,900,000 .. .. ... .. 53,300,000 ... .. ... .. .. 0.46

% change ... -11.0 .. .. ... .. -- ... ... ... ... ... ... ... --

Armco Inc.

Three months ended 9/30/91

Revenue ... ... ... ... ... ... Net ... ... ... ... ... ... Share

'91 387,600,000 .. ... ... ... (26,900,000) ... ... ... .. (0.33)

'90 418,100,000 .. ... ... ... (8,800,000) .. ... ... ... (0.12)

% change ... -7.3 ... ... ... ... -- ... ... ... ... .. ... --

Nine months ended 9/30/91

Revenue ... ... ... ... ... ... Net ... ... ... ... ... ... Share

'91 1,186,800,000 .. ... ... .. (95,000,000) ... ... .. .. (1.14)

'90 1,321,200,000 .. ... ... .. (81,000,000) ... ... .. .. (0.98)

% change ... -10.2 .. ... ... .. -- ... ... ... ... ... .. .. --

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