United States Steel Corp (X) reported a narrower second-quarter loss on Tuesday as steel prices improved, but the impact of bad weather, higher repairs and maintenance costs continued to weigh on earnings.
Net loss narrowed to $18 million, or 12 cents a share, in the three months to end-June from $78 million, or 54 cents, a year earlier. Net sales were flat at $4.4 billion.
Net income was $25 million, or 17 cents a share after adjusting for a $46 million charge for litigation reserves and other items.
Chief Executive Officer Mario Longhi said he expected operating income for all the company's businesses to "increase significantly" in the third quarter compared with the second quarter as the company returns to normal operating levels.
The Pittsburgh-based steelmaker said in its flat-rolled segment the absence of weather-related and operational challenges experienced during the second quarter is expected to generate a "favorable impact" of about $150 million. That will come from reduced repairs and maintenance costs, increased operating efficiencies and higher shipments.
In its tubular unit, results are expected to improve slightly compared with the second quarter although shipments are expected to decrease due to the indefinite idling of two facilities.
Massive excess capacity has weighed on global steel prices in recent years, pushing more steel imports into the U.S. market and putting pressure on domestic steelmakers like U.S. Steel.
(Reporting by Allison Martell in Toronto and Nicole Mordant in Vancouver; Editing by Jonathan Oatis and Lisa Shumaker)