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Ipsco (IPS) beat third-quarter targets and guided in line for the fourth quarter.

The Lisle, Ill., steel tube maker made $197 million, or $4.15 a share, for the quarter ended Sept. 30, up from the year-ago $134 million, or $2.78 a share. Sales rose 12% sequentially and 37% from a year ago to $996 million.

Analysts surveyed by Thomson Financial were looking for a $3.45-a-share profit on sales of $972 million.

Steel mill product shipments of 691,000 tons increased 30.9% over last year and were down 1.6% from the record achieved in the prior quarter. Record tubular shipments of 351,000 tons, driven by greater large diameter sales volumes and stronger U.S. energy tubular shipments, increased 9.5% over the prior year. Tubular shipments increased 17.3% from the prior quarter due primarily to increases in large diameter pipe and Canadian energy tubular shipments partially offset by lower U.S. tubular shipments.

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In the third quarter, the estimate of the 2006 annual effective tax rate was reduced to 36%, resulting in an effective tax rate for the quarter of 32%. This compares to a 38.1% rate in the prior year and a 37.6% rate in the prior period. The reduction in the estimate of the tax rate is primarily due to the planned reinvestment of U.S. earnings through the announced pending acquisition of NS Group and the resulting decrease of potential U.S. withholding tax liability on remitting funds to Canada.

"We expect the acquisition will have a sustainable positive effect on the annual tax rate for the near term," the company said. "The current quarter effective tax rate increased net earnings by $0.37 per diluted share as compared to the third quarter of 2005 and increased net earnings by $0.34 per diluted share compared to the prior quarter."

Ipsco said it expects to make $3.30 to $3.50 a share for the fourth quarter, in line with the $3.39 Thomson target, as end-user demand for plate and energy tubular goods will continue to be strong. Unabsorbed overhead and higher maintenance expenses resulting from production curtailments and a less favorable product mix related to lower large diameter sales will cause some margin compression. While demand for large diameter spiral pipe continues to be exceptionally strong, actual fourth quarter sales are expected to be lower than in the third quarter.