US Steel, AK Steel Post Weaker 3Q Results

Two American steelmakers posted sharply lower third-quarter results Tuesday, as demand for the metal used in manufacturing and construction remained muted amid the global economic downturn.

But orders improved from historically low levels earlier in the year, helped by rising demand from the auto industry.

Still, the market for steel — used in consumer goods ranging from pickup trucks to soup cans — pales in comparison to levels seen during much of last year, when surging prices helped steel makers reap record profits.

That rally ended abruptly last fall, when the global recession devastated some of the steel industry's biggest customers in the auto, construction and industrial equipment markets. Orders vanished, forcing companies like United States Steel Corp. and AK Steel Holding Corp. to scale back production and lay off workers.

The companies' results disappointed investors and some analysts, sending their shares down more than 7 percent. Shares of U.S. Steel fell $3.17, or 7.8 percent, to close at $37.41, while AK Steel shares sank $1.61, or 8.6 percent, to $17.18.

U.S. Steel, the largest U.S.-based steelmaker, reported its third consecutive quarterly loss and predicted another loss, though narrower, in the fourth quarter. It forecast stronger demand in North America, mainly due to orders from the auto industry and continued strong demand for tin. But it said output would remain flat compared with the third quarter.

While the Pittsburgh-based company said production and shipments rose significantly in the three months through September, Chairman and Chief Executive John Surma cautioned that orders have dropped in North America and Europe in recent weeks, partly due to seasonal slowdowns at factories.

"We currently have more of our facilities operating and more of our people back to work," Surma said in a conference call. But "demand trends remain uncertain as both the U.S. and global economies struggle to recover."