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US Steel

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continued to lose money in the second quarter on all the customary recessionary problems afflicting the industry: slumping demand, still-falling prices and the carrying cost of idled plants.

The iconic Western Pennsylvania steel maker also appeared to spill more red ink than Wall Street had anticipated.

The company said it had a net loss of $392 million, or $2.92 a share. But that huge loss included a battery of multi-million-dollar one-time gains, including a litigation win, a tax recovery, and a foreign currency transaction that proved to be a financial boon. The gains amounted to $1.27 a share, though one had to do the addition oneself. (US Steel also said it took a charge that reduced its net income by 3 cents a share.)

Stripping all that out would leave US Steel with a loss of $3.89 a share. Analysts were expecting a loss of $3.45.

The quarter's numbers, needless to say, compared unfavorably with the year-ago period, when the company posted a profit of $668 million, or $5.65 a share.

Revenue, meanwhile, tumbled 68% to $2.13 billion from $6.74 billion a year ago.

US Steel chief executive John Surma struck some optimistic notes, however. "There are some signs that the destocking cycle has ended in the North American and Central European steel markets," he said, "as increased customer orders across almost all industry segments have resulted in an extension of lead times."

He added that the company has started the process of plugging idled plants back in and ratcheting up production "in line with customer demand." Consequently, US Steel lifted prices on some product types, including flat-rolled steel, for the third quarter. It wasn't more specific.

But Surma also gave the sort of qualifications that are obligatory anytime an executive expresses an optimistic thought during a recession: "Despite these signs of improvement, the outlook for overall demand remains uncertain and the timing and magnitude of sustained economic recovery remain difficult to forecast."

Investors bid down US Steel shares down sharply in before-market trading Tuesday. The stock was changing hands recently at $39.25, down 5%, or $2.02, from Monday's regular session close of $41.27.

Reported by Scott Eden in New York

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