- The Washington Times - Tuesday, October 22, 2002

PITTSBURGH (AP) U.S. Steel Corp. posted earnings yesterday of $106 million for the third quarter, credited mostly to higher production and steel prices.
The nation's largest integrated steel manufacturer reported a profit of $1.04 a share, compared with a loss of $23 million, or 26 cents a share, in the same period last year.
Excluding a one-time charge, the Pittsburgh-based company reported that it earned $103 million, or $1 per share, compared with a loss of $17 million, or 19 cents a share, a year earlier.
It was the second consecutive quarterly profit for U.S. Steel, and the second straight quarter that it beat Wall Street's expectations. U.S. Steel had hinted that profits would be strong, but Wall Street had been skeptical. Analysts polled by Thomson First Call were expecting 64 cents a share.
U.S. Steel reported its first profit in a year in the second quarter, with earnings of $27 million, or 28 cents per share, and Chairman Thomas J. Usher has said that the company could post a profit this year after losing $218 million last year.
The company reported sales and other income of $1.91 billion, compared with $1.66 billion during the same period last year.
Shares of U.S. Steel rose 1 cent to $12.84 yesterday on the New York Stock Exchange.
For the second consecutive quarter, the company's production was high, with its domestic operations running at 93.7 percent capacity and its Slovakian mills running at 90.8 percent.
U.S. Steel also said that it was helped by rising steel prices, which averaged $428 per ton, about $34 per ton more compared with a year earlier.
Last week, U.S. Steel announced that it would sell its coke mills, iron mines and transportation company to a new concern formed by Apollo Management, a New York City private equity firm, for $500 million.
The deal, combined with the pending sale of its coal business, would mark a departure for the company, which was cobbled together by financier J.P. Morgan more than a century ago. The company has owned the raw materials to make steel since it was founded in 1901.
"U.S. Steel is positioning itself in the right direction with operations, especially with consolidation," said Chris Olin, an analyst with Midwest Research. "With the liquidity they have, they will be the leaders in the movement."
Mr. Usher said that U.S. Steel is likely to use the $500 million toward buying or merging with another domestic steel manufacturer, but declined to identify any companies.
The Bush administration has threatened to lift tariffs on imported steel, enacted in March, if steel manufacturers don't deliver on promises to reorganize and become more competitive.
U.S. Steel continues to look at companies in Poland and Hungary.

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