U.S. Steel reports $83 million loss

PITTSBURGH - U.S. Steel Corp. reported a first-quarter loss Friday of $83 million, greater than Wall Street expectations, but said flat-rolled steel prices have bottomed out and economic conditions appear favorable for the remainder of 2002. <br> <br> The country&#39;s largest steel producer lost 93 cents per share, compared with a net income of $9 million, or 10 cents per share, in the first quarter of 2001. <br> <br> Sales fell 8 percent during in first quarter to $1.43 billion from $1.56 billion.<br> <br> A consensus of analysts polled by Thomson Financial/First Call was for a loss of 81 cents. <br> <br> Thomas J. Usher, U.S. Steel president and chief executive, said economic conditions domestically and abroad appear to favor the company in the remainder of 2002. <br> <br> ``The removal of some domestic capacity and the 30 percent tariffs President Bush announced in March under his Section 201 remedy should provide relief for our flat-rolled segment,&#39;&#39; Usher said. ``Our domestic order rate for the second quarter sheet product shipments has been strong and prices are improving.&#39;&#39; <br> <br> The company said facilities that produce flat-rolled steel used by major manufacturers are running at capacity, which will continue to lower per-unit operating costs. <br> <br> ``We believe that flat-rolled prices bottomed in the first quarter,&#39;&#39; Usher said. ``Our flat-rolled steel shipments increased by 15 percent versus the fourth quarter 2001, and our domestic raw steel production increased to 92 percent of capability.&#39;&#39; <br> <br> The company also announced plans to sell 8 million common shares to the public. Usher called the sale a ``two-edged sword&#39;&#39; because the company needs the cash, but that it is somewhat undesirable to sell U.S. Steel stock at its current price. <br> <br> ``There&#39;s going to be some real opportunities to buy specific assets and or companies that will really enhance our strategy of moving up the value chain and will give us a real competitive edge,&#39;&#39; Usher said. ``We&#39;d hate to not have the flexibility to pursue some of these, so we have come up with this proposal for this limited offering.&#39;&#39; <br> <br> John Surma, chief financial officer at U.S. Steel, said while it was a difficult quarter with prices down in all segments of the steel industry, he echoed comments by Usher in saying that the company has a good chance of returning to profitability in 2002. <br> <br> ``We&#39;re encouraged, however, by improved operating rates and increasing stock prices for most flat-roll products,&#39;&#39; Surma said. ``We still have work to do to return this business to a solid footing of profitability and cash generation, but we&#39;re starting to see signs of progress.&#39;&#39; <br> <br> Shares of U.S. Steel were up 10 cents to $17.86 in afternoon trading on the New York Stock Exchange.

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