WILMINGTON, Del. -- On the day he took over as chairman of Bethlehem Steel Corp., Duane R. Dunham told shareholders at the company's annual meeting yesterday that the steelmaker's fortunes had improved significantly in the first quarter.
Bethlehem made $3.1 million in the three months that ended March 31 -- the first quarter of positive earnings after five straight quarters in the red, including a loss of $25.6 million in the year-ago quarter.
However, earnings per common share showed a loss of 5 cents after Bethlehem paid out $10.3 million in preferred stock dividends.
Revenue increased 15 percent to $1.1 billion, and income from operations was $19.1 million, compared with a loss of $19.5 million a year ago. Shares closed at $5.50 yesterday, up 37.5 cents, but down 47 percent from its 52-week high of $10.375 reached in April 1999.
"The financial results are an improvement, but we know they're well below where they need to be," said Dunham, 58.
The numbers beat Wall Street's estimates, where analysts, on average, had predicted an earnings-per-share loss of 13 cents, according to Zacks Investment Research.
"I think the key surprise here continues to be volume," said Waldo T. Best, an analyst at Morgan Stanley Dean Witter. "The automotive sector is very strong, and Bethlehem, because of its very strong position in automotive types of steel, is in a position to benefit from that volume." Car and light truck sales in the United States reached about 17 million vehicles last year, a record.
The meeting in the ballroom of the DoubleTree Hotel began with Curtis H. "Hank" Barnette, who had been chairman since 1992 and will continue to consult as chairman emeritus, at the helm, overseeing the re-election of directors and the appointment of PricewaterhouseCoopers LLP as the company's independent auditors.
He took questions from shareholders, after reminding them that the event was not a forum to air personal or political views.
Myron Wasiuta of Annapolis wanted to know why the company would hire the same auditor that oversaw the books at Virginia software maker MicroStrategy Inc., which recently said it would restate earnings for the past two years, and why the board had not done more to keep the company on track and its costs down.
Barnette said he was happy with PricewaterhouseCoopers' performance, and that the board could be judged by its past and future actions.
New York plant question
Marty Beahn, a 25-year veteran of the company who works at the Coke Works facility in Lackawanna, N.Y., asked if the company would upgrade the plant, which he said is unsafe and outdated.
Barnette said no changes are planned and that additional expenditures would be made as needed. He then turned the proceedings over to his successor.
"All I can say is wow," said Dunham, after Barnette handed him the gavel with a touch of mock solemnity. "Hank, you truly have been a statesman among statesmen, and I know you will continue to advance the corporation as chairman emeritus."
He acknowledged Barnette's leadership in restructuring the company, including closing the plant in the company's hometown and making each plant a separate business entity, and for his work in Washington fighting against cheap steel imports. But Dunham said there is a lot more to be done and that the changes will need to come from within the company, with a focus on reducing costs.
"We have to control our own destiny," he said. "If we don't, someone else will control it for us, and we're not about to let that happen."