(Updates with more details, analyst comments, other steel results and stock prices.)
By David Benoit
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- U.S. Steel Corp. (X) saw its third-quarter results improve sequentially and top expectations, but it swung to a loss from the prior year as concerns about weak demand remain hanging over the industry.
While shipments increased "significantly from the very low levels of the second quarter," according to Chairman and Chief Executive John P. Surma, the company predicted the current quarter would improve overall, but have similar results to the third, signaling a plateauing of the growth for now.
"We remain cautious in our outlook for end user demand as customer order rates in Flat-rolled and U.S. Steel Europe have decreased from the third quarter," the company said in a release.
North America's largest steelmaker by output added it anticipates a fourth-quarter loss on continued low operating rates. Analysts polled by Thomson Reuters recently expected a loss of 97 cents a share.
The company's stock fell 6% to $38.16 in recent trading, its lowest point since the end of July.
Longbow Research analyst Luke Folta said the stock decline ignores solid management decisions and comes along with a broader drop in the steel market.
"The number one takeaway, in my opinion... is that they have been pretty clear to say they are going to adjust production for levels that are more in line with customer demand," Folta said. "With fourth-quarter shipments expected to be lower, there were some concerns."
Both Schnitzer Steel Industries Inc. (SCHN) and AK Steel Holding Corp. (AKS) also topped analysts' expectations but slumped in Tuesday trading on concerns that the growth came only as a result of customers replacing inventories.
Schnitzer fell 5.7% to $48.25 in recent trading after saying it expects volumes to fall in the first quarter. AK Steel slumped 5.4% to $17.77.
For its third quarter, U.S. Steel swung to a loss of $303 million, or $2.11 a share, from a year-earlier profit of $919 million, or $7.79 a share. Net sales tumbled 61% to $2.82 billion. Analysts expected a loss of $2.87 a share on revenue of $2.72 billion.
Shipments fell 35% from a year ago but jumped 41% from the prior quarter. The average selling price of flat-rolled products was down 33% from a year ago and 11% from the second quarter.
-By David Benoit, Dow Jones Newswires; 212-416-2458; david.benoit@dowjones.com
(Mike Barris contributed to this article.)