The tough global economy is showing little sign of loosening its grip on the steel industry.
Revenue at United States Steel Corp. slid 8 percent revenue in the third quarter, the company said Tuesday, as sluggish global growth dragged down shipments and prices. Domestic steel supplies are piling up as companies outside of the U.S. try to boost their U.S. market share.
The Pittsburgh manufacturing giant doesn't see things getting much better for 2012, with the ongoing debt crisis in Europe, slowing growth in emerging markets and economic uncertainty in North America.
Profit doubled during the quarter, but that's partly due to a $27 million tax benefit. Net income totaled $44 million, or 28 cents per share, in the quarter that ended Sept. 30. That compares with $22 million, or 15 cents per share, a year ago.
The recent results also included a $22 million after-tax charge for a lump payment related to a new labor agreement.
Revenue fell from more than $5 billion during the same period last year, to $4.65 billion.
Companies have pulled back on purchases of everything from computers, industrial equipment and other long-lasting goods.
The Commerce Department reported last week that orders for durable goods, products expected to last at least three years, rose 9.9 percent in September. But most of the increase was driven by a spike in aircraft orders, which are extremely volatile.
Also last week, HSBC's monthly purchasing managers' index for China rose to a three-month high of 49.1 points on a 100-point scale. That level still signals contraction. And Japan said Tuesday that its industrial output contracted by 4.1 percent in September from 8.1 percent a year earlier.
It all adds up to a tough environment for steelmakers.
Earlier this month Nucor Corp. reported third-quarter net income fell 39 percent on lower sales and prices, and revenue dropped 8.6 percent. Last week AK Steel Holding Corp. said its third-quarter loss widened to $60.9 million and revenue fell 7.7 percent. Both companies said difficult economic conditions hurt volumes and prices. Nucor said it didn't see any improvement in the global economy anytime soon.
In the third quarter, U.S Steel said shipments increased from a year ago for flat-rolled steel used in manufacturing automobiles, heavy equipment and construction, but fell for pipes and other products used by the energy industry and in the European division. Average prices dropped in all three sectors.
U.S. Steel Chairman and CEO John Surma said he expects continued weakness in Europe and emerging markets, along with uncertainty about the North American economy. He forecast lower prices and shipments for all three business segments in the fourth quarter.
However, he also noted that some market conditions have recently begun to improve in North America, which he expects to benefit pricing.