WILMINGTON, Del. -- Good news doesn't draw crowds.
In recent years, Bethlehem Steel Corp.'s annual shareholder meeting has been a noisy, painful affair, featuring union picket lines and announcements of massive losses and layoffs.
But yesterday, the ornate ballroom of the Hotel Dupont was almost empty as Bethlehem Chairman Curtis "Hank" Barnette said the booming demand that has restored Bethlehem to profitability should continue through 1996.
Mr. Barnette told the handful of executives and shareholders in attendance that the nation's No. 2 steelmaker, which made its first annual profit this decade in 1994, saw its earnings continue to grow in the first three months of 1995.
Bethlehem made $52.5 million in the three months that ended March 31, or 38 cents a share, up from $13 million, or 2 cents a share, from the same period last year. Sales rose 10 percent to $1.24 billion.
The Sparrows Point yard in Baltimore County was profitable last year and is expected to make money again this year, Mr. Barnette said. The company's Burns Harbor, Ind., facility is rebounding from last year's losses now that machinery repairs are finished, he said.
Mr. Barnette indicated that he expected profits to continue to grow this year due to cost reductions and price increases. Bethlehem, which raised its prices by 3 percent in January, announced it will increase its prices by another 2 percent, or about $15 a ton, in early July.
None of this seemed to impress Wall Street investors, though, as Bethlehem's stock, which has fallen nearly 40 percent since early August, closed down 75 cents at $14.75 in New York Stock Exchange trading yesterday.
Although the shareholders yesterday authorized Bethlehem to issue another 100 million shares -- potentially bringing the total number of outstanding shares to 250 million -- Mr. Barnette said he did not believe fears of dilution were hurting the stock price.
He said the company has no plans to issue the shares, but wants to hold them in case it finds a good business opportunity.
Bethlehem wants to continue specializing in the steel business, but is looking for other products or related services from which it could profit, Mr. Barnette said.
"We want to edge out into other related businesses. . . . At present we have no plans to issue those shares . . . but you need to look years ahead. We need that flexibility," he said.
Others in the steel industry yesterday shared Mr. Barnette's optimism. John Pazdernik, inside sales manager for Durrett-Sheppard Steel Co. Inc, a Baltimore-based steel distributor, said demand for steel has been rising so strongly that manufacturers and other users are having to swallow most of the price increases.
But he said demand is set to level off and should remain stable through 1996.
Charles Bradford, a steel industry analyst for UBS Securities in New York, said investors are overly pessimistic about an impending recession. Bethlehem Steel is set to make a lot of money through next year, he said.
"They are doing much better than people are giving them credit for," he said.
The company, which had previously announced it would stop producing steel in its hometown of Bethlehem, Pa., also said yesterday that would happen in November, with the layoff of 1,700 workers. The company will still process steel there.