Oregon Steel Mills reported sales of $348 million for the third quarter of the year, a record. The figures for the quarter were an 84 percent increase from the third quarter of 2003.
The company added that steel shipments for the quarter stand at 458,000 tons, compared to the third quarter of 2003 shipments of 431,000 tons. This increase in shipments is primarily due to increased shipments of plate, coil, structural tubing and rail products partially offset by lower shipments of welded pipe, rod and bar and seamless pipe products. The increases in sales and average sales price per ton were primarily due to higher average selling prices for plate, coil, welded pipe, rail and rod and bar products and the increased shipments noted above.
Operating income for the third quarter of 2004 was $64 million (an average of $140 per ton), including the $4.5 million Settlement Charges. Operating income before the Settlement Charges was $68.5 million (an average of $150 per ton). This compares to an operating loss of $12.9 million in the third quarter of 2003.
Earnings before interest, taxes, depreciation and amortization for the third quarter was $70.5 million, compared to a negative $2.5 million in the third quarter of 2003.
In its discussion for the past year, as well as forecasting forward, the company not4ed that it expects to ship about 1.7 million tons of products and generate approximately $1.2 billion in sales. In the Oregon Steel Division the sales product mix is expected to consist of 600,000 tons of plate and coil, 200,000 tons of welded pipe and 65,000 tons of structural tubing. At these shipment levels the Company expects to run its Portland combination mill at about 70 percent of its practical capacity.
However, the company also notes that due to the fourth quarter having less shipping days in the November and December timeframe, it expects total shipments for the fourth quarter to be lower than the third quarter. Fourth quarter shipments will also be impacted by a partial melt shop outage at RMSM that resulted in about 10,000 tons of lost production in October of 2004. While average selling prices are expected to be higher in the fourth quarter of 2004 than the third quarter, the Company expects margins to decrease, as product surcharges will not offset higher scrap costs and the continuation of record slab prices.