United States Steel Q3 Profit Triples But Lowers Forward Outlook

October 28, 2008 7:33 p.m. EST

Pittsburgh, PA (AHN) - U.S. Steel announced Tuesday third quarter profit tripled as steel prices soared on strong demand. However, the company did offer a tepid outlook for the current quarter as they expect softening demand in Europe.

The steel producer posted record third quarter profit of $919 million or $7.79 a share, up from $269 million or $2.27 a share in the same period a year ago.

The company took a one-time charge of roughly 67 cents a share for expenses related to environmental remediation and employee signing bonuses. Excluding the charge, U.S. Steel earned $8.79 a share.

Earnings were well ahead of estimates, analysts were expecting $7.09 a share, according to Thomson Reuters.

Third quarter revenue grew to $7.31 billion, up 68 percent from last year. The result topped analyst estimates for $7.2 billion in revenue.

Profit per ton increased to $227 in the third quarter from $136 per ton last year.

U.S. Steel said they expect fourth quarter profit to decline from last year due to falling demand. Softening demand already led the company to slow production at the tail end of the third quarter.

"The volatile global economic climate is having significant negative effects on our business and our forward view is limited because of low order backlogs and short lead times," said Chairman and CEO John Surma, according to Reuters.

"We expect to continue to operate at reduced production levels, corresponding with customer order rates," he said.

Despite record third quarter profits, shares of U.S. Steel are down 1 percent to $30.50 in late afternoon trading.