U.S. Steel's 4Q08 Profit Soars 780% to $308 Million

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Researched by Industrial Info Resources (Sugar Land, Texas)--The U.S. Steel Corporation (NYSE:X) (Pittsburgh, Pennsylvania) has announced a fourth-quarter 2008 net income of $308 million, up 780% compared with 4Q07's $35 million, as a result of strong sales in its Tubular segment as well as a gain related to an acquisition. Revenues for the quarter totaled $4.57 billion, up slightly from $4.54 billion in the same quarter of the previous year.

However, the company said that it does not expect the momentum to continue. "We expect an operating loss in the first quarter as results continue to reflect the extremely difficult global economic environment," Chairman and CEO John Surma said in a statement. "We do not know when conditions may improve. ... In the meantime, we continue aggressive efforts to maximize liquidity and reduce costs and will take additional actions as market conditions warrant." The company had recently idled plants across the country and announced layoffs, as steel prices plummeted toward the end of the year. For more information, see related December 22, 2008, news article - U.S. Steel Idles Plants Across U.S. -- Christmas Now a Time of Uncertainty.

Fourth-quarter results from the company's Tubular segment were a record as a result of an increase in average realized prices and favorable market conditions for the products, the company stated.

Segment Income

• Tubular: $559 million, up 573.5% compared with $83 million year over year
• Flat-rolled: a loss of $2 million, compared with a profit of $63 million a year ago
• U.S. Steel Europe: a loss of $134 million, compared with a profit of $85 million a year ago
• Other businesses: $22 million, down from $26 million a year ago

Capital expenditures for the 2009 fiscal year are expected to total about $740 million, the company stated. Industrial Info is tracking 26 active U.S. Steel projects worth $1.98 billion as part of our North American Project Database. The projects range from a $2 million steel-tube mill closure to a coke plant modernization.

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