Wheeling-Pittsburgh Corporation reported its financial results for the year and quarter ended December 31, 2004.
For 2004, the Company reported net income of $62.5 million or $5.68 per diluted share. Comparison with prior year results is not meaningful due to the Company’s reorganization on Aug. 1, 2003. Net income for the fourth quarter of 2004 totaled $6.4 million, or $0.46 per diluted share. This compares with a net loss of $23.7 million or $2.49 per diluted share in the fourth quarter of 2003, and net income of $35.6 million or $3.42 per diluted share for the third quarter 2004.
“Our strong financial performance in 2004 and successful secondary public stock offering significantly strengthened our liquidity as we entered 2005,” said James G. Bradley, Chairman, President and CEO. “Additionally, production from our new Consteel(R) EAF, which began operation in the fourth quarter and is exceeding the manufacturer’s production guarantee, is bringing about our transition to a hybrid steel producer.”
The Company reported net sales for 2004 of $1.4 billion on shipments of 2.1 million tons, with an average steel price per ton shipped of $661. Cost of goods sold in 2004 totaled $1.2 billion, averaging $568 per ton shipped.
The Company reported net sales for the fourth quarter of $373.7 million on shipments of 503,000 tons of steel products. Steel prices averaged $743 per ton shipped in the fourth quarter of 2004, down slightly from the third quarter. Cost of goods sold totaled $336.4 million and averaged $669 per ton shipped. Costs in the quarter included maintenance spending in connection with planned outages that were taken at the Company’s hot strip mill and finishing mills, as well as costs incurred during a 12-day period in December following a BOF ductwork collapse, during which there was minimal production. Raw material costs increased slightly above third quarter levels despite significantly less purchased coke in the fourth quarter.
The Company is pursuing insurance recoveries for property damage related to the BOF ductwork collapse, for which a $2 million deductible was recorded in the fourth quarter. The impact of the collapse on fourth quarter earnings was $23 million, before the impact of profit sharing and VEBA. In addition, shipments in the first quarter of 2005 are expected to be negatively impacted by a further loss of 85,000 tons. A business interruption claim is being prepared which, after a separate deductible, is expected to be significant. No recognition was made in the fourth quarter for the anticipated recovery under the business interruption claim.
Shipments for the first quarter 2005 are expected to be in the 500,000 to 515,000 ton range, and the average selling price is expected to be comparable with the fourth quarter. Cost of sales per ton in the first quarter 2005 is expected to be down slightly.
Murdok | Breaking eBusiness News
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