 |
 |
 Q3, 1997 BETHLEHEM, Pa., Wednesday, October 29, 1997 -- Bethlehem Steel Corporation today reported net income of $41 million, on sales of $1.11 billion, for the third quarter of 1997 compared to net income of $11 million, on sales of $1.17 billion, for the third quarter of 1996. After deducting preferred dividends, net income per common share was $.27 for the third quarter of 1997 compared to break-even for the third quarter of 1996. Results for the third quarter of 1996 included a restructuring charge of $15 million. Without this charge, net income for the third quarter of 1996 was $23 million, or $.12 per common share. For the first nine months of 1997, net income was $239 million, or $1.85 per common share, including an after-tax gain of $113 million, or $1.01 per common share, related to the sale of our equity interest in Iron Ore Company of Canada (IOC). Net income for the first nine months of 1996 was $38 million, or $.06 per common share, including the restructuring charge. Excluding the effects of this year's IOC gain and 1996's restructuring charge, net income for the first nine months of 1997 was $126 million, on sales of $3.51 billion, compared to net income of $50 million, on sales of $3.53 billion, for the first nine months of 1996. Segment Results The Basic Steel Operations segment had income from operations of $66 million for the third quarter of 1997 compared to income from operations of $32 million (including the restructuring charge) for the third quarter of 1996. Without this charge, income from operations for the third quarter of 1996 was $47 million. The improvement of this segment's third quarter 1997 operating results compared to the third quarter of 1996 was due to lower costs as a result of exiting Bethlehem Structural and increased shipments at our remaining businesses, partially offset by lower realized prices. Income from operations was $342 million for the first nine months of 1997 compared to $106 million for the first nine months of 1996. Excluding the effects of 1997's IOC gain and 1996's restructuring charge, income from operations for the first nine months of 1997 was $207 million compared to $121 million for the first nine months of 1996. This improvement was primarily from lower costs related to the exit of Bethlehem Structural. Third quarter 1997 income from operations declined from the second quarter of 1997 (excluding the IOC gain) because of lower realized prices and lower shipments. While prices for our steel products were only slightly lower during the third quarter, our average realized prices were reduced by lower sales of raw materials, such as iron ore and coal, and a different product mix principally caused by the automotive model-year changeover. The Steel Related Operations segment (BethForge, CENTEC and BethShip) reported losses from operations of $8 million and $25 million for the third quarter and first nine months of 1997 compared to losses of $7 million and $24 million for the third quarter and first nine months of 1996. Status of Restructuring Plans As previously announced, we recently completed the sales of our BethForge, CENTEC and BethShip Sparrows Point Yard businesses. BethForge and CENTEC were sold to West Homestead Engineering and Machinery Company (WHEMCO) in late September. The sale of BethShip to The Veritas Capital Fund was completed early in the fourth quarter. Bethlehem Structural ended operations in March. We have sold all of Bethlehem Structural's inventory and are now in the process of selling individual assets. These actions complete the exit of the five businesses that were part of the comprehensive restructuring plans announced last year. The plans also included the write-down as an impaired asset of our Bethlehem Coke operation, which we continue to closely monitor. Also, as previously announced, we sold our HPM coal operation to Power Mountain Coal Company, a subsidiary of A.T. Massey Coal Company, Inc., during October. Although not part of the 1996 restructuring plans, this sale is a continuation of our basic strategy of concentrating on our principal steelmaking divisions and rebuilding our financial strength. Liquidity and Capital Structure At September 30, 1997, total liquidity, comprising cash, cash equivalents and funds available under our bank credit arrangements, totaled $513 million compared to $446 million at December 31, 1996, and $421 million at September 30, 1996. At September 30, 1997, funds available under our bank credit arrangements totaled $349 million. Cash provided from operating activities for the first nine months of 1997 was $440 million compared to $266 million for the first nine months of 1996. Other sources of cash included proceeds from the sale of IOC in the second quarter of 1997 and the sale of BethForge and CENTEC in the third quarter of 1997. Principal uses of cash during the first nine months of 1997 included pension funding and capital expenditures. Capital expenditures were $189 million for the first nine months of 1997 compared to $206 million during the year-earlier period. Capital expenditures are currently expected to be about $250 million in 1997 compared to $259 million in 1996. We contributed $125 million to our pension fund during the third quarter of 1997, for a total of $390 million so far this year. Principal uses of cash during the remainder of 1997 include capital expenditures and additional pension funding. Outlook We believe the domestic economy will continue on a course of moderate and sustainable growth and low inflation. The demand from the major steel-consuming sectors continues to be very good and domestic industry steel shipments in 1997 and 1998 should be about 100 million tons, about the same volume shipped in 1996. We recognize, however, that competition will remain intense in all our markets particularly as a result of new steel production capacity and unfairly traded imports. Dividends The Board of Directors today declared dividends of $1.25 per share on Bethlehem's $5.00 Cumulative Convertible Preferred Stock, $0.625 per share on Bethlehem's $2.50 Cumulative Convertible Preferred Stock and $0.875 per share on Bethlehem's $3.50 Cumulative Convertible Preferred Stock, each payable December 10, 1997, to holders of record on November 10, 1997. No dividend was declared on Bethlehem's Common Stock. Financial Home E-mail comments to: [email protected]
|
