Bethlehem Steel Corp. reported second-quarter earnings yesterday of $10 million, which beat analysts' expectations.
The $10 million profit for the three months that ended June 30 does not include an unusual after-tax gain of $22 million from the sale of Bethlehem's interest in Presque Isle Corp. or a payout as a policyholder and owner of Metropolitan Life Insurance Co., which recently became public. Including the one-time gains, earnings per share were 16 cents.
That compares with a net loss of $30 million, or 31 cents a share, in the second quarter last year.
Net sales in the second quarter were $1.06 billion, compared with $985 million in the second quarter last year.
Duane R. Dunham, chairman, president and chief executive of the Bethlehem, Pa.-based steelmaker, credited lower costs and slightly higher prices for the gain. He said he expects the approximately $615 million in modernization at its Sparrows Point division in Baltimore to start benefiting the company, which had dismal results last year.
The company employs about 4,000 at Sparrows Point.
"While our second-quarter financial performance was unsatisfactory, it did reflect continued improvement over the past three quarters, primarily from lower costs," he said.
Waldo T. Best, an analyst at Morgan Stanley Dean Witter, said that, while Bethlehem beat his expected loss of 5 cents a share, the next two quarters will be difficult for Bethlehem and big steel companies in general.
He said increased supply and lower prices could be compounded by a slowdown in demand.
"The big news is that in the second half there will be trouble," he said. "They were climbing out of a hole, and it's like someone is dropping concrete on their heads."
Bethlehem shares closed unchanged yesterday at $4.25.