The steelmaker expects to continue seeing red ink.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WARREN -- WCI Steel lost money for the fourth consecutive quarter in the three months ending July 31, and officials are blaming a general slowdown in the economy and rock-bottom steel prices.
The Warren steelmaker reported a third-quarter net loss of $18.7 million for the quarter ending July 31, compared to a $2.4 million profit in the same period a year ago. WCI also lost $22.2 million in its second quarter, and was in the red by $32.5 million in the first -- its worst quarter since the Renco Group Inc. of New York bought the company in 1988.
Tim Roberts, a WCI spokesman, said the second and third quarters were similar. The second quarter loss appears higher, he explained, because WCI had to take a one-time, $3.9 million accounting charge when it closed its Youngstown Sinter Co. to cut costs.
Cash reserve: WCI has been able to survive a general slump in the steel industry nationwide because it has a healthy cash reserve and a $100 million line of credit.
The company drew from its reserve in the third quarter to help pay a $15 million payment on secured notes, ending with a total of $45.9 million, down from $67.5 million at the end of the previous quarter.
Roberts said WCI actually produced and sold more steel in the third quarter than in the second, but it made less money because steel prices were lower.
Cheap imported steel is one major force driving down prices, he said, but steel mills operating under bankruptcy protection also are selling at a discount to build their volume.
Roberts said WCI is expecting volume levels to continue without much change in the fourth quarter and prices will likely decline slightly, too.
Employment levels at WCI's Warren plant remain stable. The company's contract with United Steelworkers of America Local 1375 prohibits layoffs of any employee with three years or more experience. WCI has 2,000 employees.