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United States Steel Corp announces idle and layoffs

A view of United States Steel Corp. from 14th Street on Wednesday, March 25, 2015 in Granite City. The company had announced it would temporarily idle its operations in Granite City and lay off hundreds of local workers. Photo by Huy Mach, hmach@post-dispatch.com

This story was updated at 10:05 a.m. to include news from Wednesday's conference call with analysts. Earnings were released Tuesday evening.

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United States Steel Corp. is recovering the cost of idling its Granite City mill by running three other mills at higher capacity, top company officials said Wednesday.

Still, the steel giant's operating rates are the lowest since the recession year of 2009, CEO Mario Longhi said on a conference call with analysts.

Longhi again said that the closing of the 2,000-employee Granite City mill is temporary. Layoffs at the mill began late last month.

The company recorded $99 million in charges for idling the mill in its financial report for the December quarter. Longhi said the company had more than made up the cost of the idling by increasing capacity utilization at its Gary, Great Lakes and Mon Valley works.

U.S. Steel on Tuesday reported a fourth-quarter loss of $999 million, reversing a profit a year ago, as revenue plunged 37 percent and the company blamed cheap subsidized imports for hurting the price of flat-rolled steel.

The Pittsburgh-based company said it had a loss of $6.83 per share, versus a profit of $1.83 per share a year ago. Losses, excluding costs such as the major write-down of its deferred tax assets, came to 23 cents per share.

The average estimate of nine analysts surveyed by Zacks Investment Research was for a loss of 85 cents per share.

The quarterly loss included $99 million reflecting costs related to the temporary idling of the Granite City Works, where approximately 2,000 steelworkers were laid off in December.

Net sales fell 37 percent to $2.57 billion, also surpassing Street forecasts. Three analysts surveyed by Zacks expected $2.49 billion.

Shares are down sharply Wednesday morning, trading at $6.66, down about 14 percent, at 10:13 a.m. Central. 

CEO Mario Longhi said in a statement the company hopes to trim costs this year, saying it is "facing significant headwinds and uncertainty in many of the markets we serve." The company forecast the year to be break-even on an adjusted basis.

For 2015, the company reported a loss of $1.51 billion, or $10.32 per share, swinging to a loss in the period. Revenue fell to $11.57 billion, down 34 percent from $17.51 billion the previous year.

Jim Gallagher of the Post-Dispatch contributed to this report by The Associated Press.

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