U.S. Steel reported a first-quarter loss Tuesday, weighed down by a crush of cheap imports, depressed energy market conditions and a charge for shutting down raw materials production facilities.
The Pittsburgh steel producer said it lost $75 million, or 52 cents per share, vs. earnings of $52 million, or 34 cents per share, in the year-ago quarter.
Sales fell 26 percent to $3.27 billion while shipments were off 20 percent.
The company said its U.S. flat-roll mills operated at 60 percent of capacity during the quarter vs. 75 percent in the fourth quarter and 81 percent a year ago.
The results included a charge of $65 million, or 45 cents per share, for closing down coke production plants.
Excluding that item, the adjusted quarterly loss was 7 cents per share.
Analysts had expected the company to report adjusted earnings of 22 cents per share on sales of $3.4 billion.
“Our results reflect extremely challenging market conditions, including the negative impact of the tremendously high level of imports, which have contributed to reduced volumes and averaged realized prices,” president and CEO Mario Longhi said in a statement.
Earlier in the day, Mr. Longhi told reporters that significant increases in steel imports and problems in the oil patch have created what he described as “the brutality of market conditions.”
Speaking to reporters following the company’s shareholder meeting at U.S. Steel headquarters Downtown, Mr. Longhi said about 2,800 of the approximately 9,000 U.S. Steel employees who have received layoff warnings in recent months have actually been put out of work so far.
“We’re preparing for a stormy period ahead,” Mr. Longhi said. “I really wish I knew how long it was going to last.”
The latest layoff warnings were issued this month to about 1,700 workers in the company’s tubular division, which has been hard hit by falling oil prices.
Mr. Longhi said one of the division’s customers has cut back the number of rigs it is operating from seven to one.
The company’s tubular business went from reporting a profit of $121 million before interest and taxes in the fourth quarter to a $1 million profit in the first quarter.
During the shareholder meeting, Mr. Longhi said the U.S. steel industry is being “irreparably harmed by reckless trade practices.”
Imports are on track to reach 47 million tons this year, according to the latest industry data. Finished steel imports have captured about 34 percent of the U.S. market, according to the American Iron and Steel Institute.
Shareholders overwhelmingly elected Mr. Longhi and three others to the board of directors and approved the steel producer’s pay practices.
The so-called “say-on-pay” vote was advisory and is not binding on the company.
The results were announced after Wall Street closed.
U.S. Steel shares finished Tuesday at $26.78, up 52 cents, but were headed lower in after-hours trading.