U.S. Steel Profits Surged, Then Tanked

United States Steel Corp.’s 2008 net income soared to $308 million from $35 million a year ago, as strong pipe sales and acquisition-related gains boosted results. But, the Pittsburgh-based steel maker forecast an operating loss in the current quarter due to the global economic slowdown, the Associated Press reports.

Quarterly sales rose to $4.57 billion from $4.54 billion last year, helped by strong sales from U.S. Steel’s tubular steel business. Fourth quarter results included a gain of $76 million, related to U.S. Steel’s acquisition of a portion of a partnership called Clairton 1314B. U.S. Steel sells coke, a steel making material, and byproducts through Clairton 1314B.

For 2008, U.S. Steel’s profit more than doubled, jumping to $2.13 billion, from $879 million in 2007. In October, U.S. Steel posted record third-quarter results, helped by surging prices, but warned that fourth-quarter results would decline amid slowing demand from North America and Europe.

In a sharp contrast, U.S. Steel has recently announced a layoff of 675 of its workers in North America and is idling three plants temporarily, affecting about 3,500 workers. During the quarter, U.S. Steel’s share price sank 48%, hitting its lowest point in five years in November. In 2008, U.S. Steel shares shed 67% of their value.