Oregon Steel Mills ( OS), the specialty and commodity steel maker, posted a 26% drop in earnings in the fourth quarter, hurt by higher costs. The company earned $32.9 million or 92 cents a share, compared with $ 44.7 million or $1.27 cents a share, a year ago. Adjusted for special items related to sale of real estate and other assets and an impairment charge, the company earned $25.8 million, or 72 cents a share. Analysts polled by Thomson First Call were expecting $33.43 million or 80 cents a share in the most recent quarter. Fourth-quarter revenue rose 8.3% from a year ago to $327.4 million. Analysts were expecting revenue of $349.5 million. For the full year 2006, the company expects to ship approximately 1.75 million tons of products and generate about $1.48 billion in sales. This compares with approximately 1.5 millions tons of shipments and $1.26 billion in sales for 2005. Analysts were looking for revenue of $1.27 billion in the year 2006. Oregon Steel also said that lower raw material costs and higher production would result in a significant increase in operating income in 2006 over that of the previous year. Oregon Steel said that average sales price in the fourth quarter was $863 a ton compared to $840 a ton a year ago. Overall shipments were 379,200 tons compared with 359,400 tons in the previous year. In the fourth quarter, furnace installation activities reduced cast steel and finished steel production by about 130,000 tons and 40,000 tons. Higher costs of a new electric arc furnace start-up and restart of a tube mill hurt earnings in the most recent quarter.