Bethlehem Steel loss narrowed as sales rose 2% in 2nd quarter

It improved from $8.80 a share in the red to 98 cents

July 23, 2002|By Kristine Henry | Kristine Henry,SUN STAFF

Bethlehem Steel Corp.'s loss narrowed in the second quarter as sales rose, and the company, currently in bankruptcy, said the outlook for the steel market is strong.

The steelmaker, with 3,400 employees locally, lost $119 million, or 98 cents a share, in the three months that ended June 30, compared with a loss of $1.1 billion, or $8.80 a share, in the second quarter last year, which included one-time charges of a little more than $1 billion.

Excluding unusual items, including furnace outages, the company's net loss was $82 million, vs. $119.5 million in the corresponding period last year.

Sales in the quarter were $933.5 million, up 2 percent from $911 million a year ago.

"We expect our financial performance to continue to improve this year as prices continue to be restored and costs are further reduced," said Robert S. "Steve" Miller Jr., Bethlehem's chairman and chief executive.

"Our liquidity, comprising cash and borrowing availability under our committed credit facility, was $240 million at the end of the quarter."

That compares with total liquidity of $273 million at the end of March. Miller said this month that the company has enough assets to continue to operate for at least a year.

The company reported cash and cash equivalents of $62 million at the end of last month, compared with $104 million at the end of December.

Bethlehem, which filed for Chapter 11 bankruptcy protection in October, said this month that it planned to slash employee benefits and negotiate a new labor contract to become solvent.

The company is in joint-venture talks with a Brazilian steelmaker for its Sparrows Point plant. But Bethlehem says it must try to regain its financial footing on its own as it pursues such options.

The industry received a boost in March when President Bush imposed tariffs of up to 30 percent on selected steel imports. That drove prices up more than 40 percent on some products. Prices were also driven higher by short supply after several domestic mills shut down.

Bethlehem officials have noted, however, that more than half of the company's business comes from long-term contracts with locked-in prices and that increased prices on the spot market do not translate into correspondingly higher revenue figures.

"Our business outlook and the market for steel remains positive," Miller said, "but we have many hurdles to overcome in order to emerge form Bankruptcy Court protection."

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