Losses at Bethlehem Steel extend into third quarter

October 29, 1992|By Ross Hetrick | Ross Hetrick,Staff Writer

Bethlehem Steel Corp., which operates the Sparrows Point steel mill and shipyard, continued its losing streak in the third quarter.

The company reported a loss of $71.5 million, or 92 cents a share, for the three months, compared with a loss of $60.6 million in the same quarter last year.

Bethlehem's last profitable quarter was the third quarter of 1990, when it earned $4.3 million.

Bethlehem, the country's second-largest steel company, also said it approved a modernization plan for its rail products and pipe division in Steelton, Pa. The plan is linked to a tentative agreement with the United Steelworkers of America to reduce the work force by 500 workers at Steelton and at the BethForge Division in Bethlehem, Pa.

The reductions would come through changes in work practices and manning. The agreement, which must be ratified by union members, includes an early-retirement incentive program.

The cost of the modernization program was not given.

Bethlehem Chairman Walter F. Williams attributed the loss to the sluggish economy and to intense competition, which includes foreign imports. He also cited lower steel prices, an unfavorable mix of products sold and higher job costs.

Mr. Williams said in a statement that the company faces further costs from the start-up of a modernized hot strip mill at Sparrows Point. The Sparrows Point shipyard had improved results

because of increased fabrication and repair work, he said.

The steel mill has a work force of 5,600; the shipyard employs 1,200.

Bethlehem continues to be hurt by the poor economy, weak activity in key markets and high levels of imports and will lose money again next quarter, Mr. Williams said.

"I am confident that Bethlehem, with the active support and involvement of all our employees, will successfully return to sustained profitability in the years ahead," he said.

This was Mr. Williams' last earnings report before retiring. Curtis H. Barnette has been named to succeed him as chairman and chief executive officer at the end of this month.

Vahid Fathi, a metals analyst for Kemper Securities Group in Chicago, said the quarterly loss, driven primarily by the poor prices steel companies are receiving, was higher than he expected.

Mr. Fathi said he expected the industry to begin turning around in the first half of next year.

He based his prediction on recent announcements that German andBritish steel companies were cutting production because of pressure from Eastern European imports. Mr. Fathi also said he expects foreign companies to scale back imports to the United States because of a pending trade case against them that has been filed with the Commerce Department. "It behooves foreign manufacturers to show some restraint," he said.

Three months ended 9/30/92

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

92.............1,007,800,000......(71,500,000).........(0.92)

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

% change................-10.1...............NA.. ...........NA

Nine months ended 9/30/92

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

92.............3,017,500,000.......(180,000,000)......(2.50)

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

% change................-8.3..................NA...........NA

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