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BETHLEHEM STEEL ANNOUNCES THIRD QUARTER 1993 RESULTS

 BETHLEHEM, Pa., Oct. 27 /PRNewswire/ -- Bethlehem Steel (NYSE: BS) today reported net income of $31 million, or $.23 per common share, for the third quarter of 1993, compared to a net loss of $58 million, or $.76 per common share, for the third quarter of 1992.
 Curtis H. Barnette, Bethlehem's chairman and chief executive officer, said: "This was Bethlehem's first quarterly profit since the third quarter of 1990. It is a key step in our return to profitability and reflects further improvement in our results since the beginning of the year. This is principally due to reduced operating costs, an improved product mix at the Burns Harbor and Sparrows Point Divisions and the continued restoration of fair value for our products."
 Net income for the third quarter of 1993 includes a one-time tax benefit of $25 million resulting from new tax legislation which helps offset approximately $20 million in one-time unusual costs incurred in connection with recently completed labor negotiations.
 Bethlehem reported a net loss of $15 million, or $.49 per common share, for the first nine months of 1993 compared to a net loss of $396 million, or $5.24 per common share, for the first nine months of 1992. The net loss for the first nine months of 1992 included a $250 million charge for the cumulative effect of changes in accounting principles and a $25 million litigation charge.
 SEGMENT RESULTS
 Operating results for Basic Steel Operations continued to show steady improvement as this segment reported income from operations of $30 million for the third quarter of 1993, an improvement of $20 million over second quarter 1993 and $85 million over third quarter 1992. Operating income would have been higher by about $20 million in the third quarter of 1993 if it had not been for the unusual costs arising from the phase-down of operations in connection with recently concluded labor negotiations at the Burns Harbor and Sparrows Point Divisions and a five week strike at an affiliated iron ore operation.
 The Basic Steel Operations segment reported income from operations of $13 million for the first nine months of 1993 compared to a loss from operations of $119 million for the year earlier period. The loss from operations for the first nine months of 1992 includes the previously mentioned litigation charge.
 Increased volume, lower operating costs and an improved product mix at the Burns Harbor and Sparrows Point Divisions were the primary reasons for the improved results for the first nine months of 1993 over the same period in 1992. Product mix was better primarily because of the successful operation of the new hot-dip galvanizing lines at these Divisions which started up in December 1992. Operating results in 1993 have also benefited from Sparrows Point's modernized hot strip mill.
 While steel prices for some products have improved during 1993 and, on average, were higher in the third quarter of 1993 than in the third quarter of 1992, average realized steel prices for the first nine months of 1993 remained below the levels realized for the first nine months of 1992.
 A new six-year labor agreement was reached with the United Steelworkers of America (USWA) in early August covering employees at the Burns Harbor and Sparrows Point Divisions. The agreement provides for opportunities to reduce costs and for flexible work practices and opportunities to improve productivity in exchange for improved employment security. Employees will receive certain improvements to their pension benefits, a signing bonus and certain other bonuses, a $.50 per hour wage increase in August 1995, and profit sharing. The contract provides for a reopening of certain economic provisions after three years. A new six-year labor agreement was also reached during the third quarter with USWA-represented employees at an affiliated iron ore operation following a five week strike.
 A weak market for structural products, competitive pressures and operating problems have adversely affected results at Bethlehem Structural Products. Structural Products is continuing with its cost reduction plan and work is beginning on its recently announced modernization program which, when implemented, should improve this Division's performance.
 At Pennsylvania Steel Technologies, significant progress is being made on the modernization program which is scheduled for completion during the second half of 1994 and which will make PST the leading low- cost domestic producer of quality rails and specialty bloom products.
 The Steel Related Operations segment had losses from operations of $9 million and $16 million for the third quarter and first nine months of 1993 as the markets for these operations remain very depressed. In addition, the BethShip Division incurred unusual costs in connection with a new labor agreement which was reached after a two week strike. This segment had losses from operations of $3 million and $17 million for the third quarter and first nine months of 1992.
 The BethShip Division completed work on a tunnel fabrication contract during the third quarter of 1993 and has received a contract to renovate two vessels for the U.S. Ready Reserve fleet.
 BethForge, Inc. has announced the installation of an ingot teeming facility and vacuum degassing unit at Pennsylvania Steel Technologies to take advantage of the new D.C. electric furnace and ladle refining furnace being installed as part of that business's modernization program. This new facility, with its lower cost, higher quality ingots, will replace BethForge's existing steelmaking facility during 1995.
 LIQUIDITY
 Cash and cash equivalents were $233 million at Sept. 30, 1993, compared to $208 million at December 31, 1992 and $127 million at Sept. 30, 1992. Cash provided by operating activities was $73 million during the first nine months of 1993 compared to $19 million during the first nine months of 1992.
 Principal uses of cash during the first nine months of 1993 include capital expenditures, pension funding and an increase in working capital. Inventories were built during the third quarter in connection with recently concluded labor negotiations at the Burns Harbor and Sparrows Point Divisions and the upcoming blast furnace reline at Burns Harbor.
 During the third quarter, Bethlehem contributed $25 million to its pension fund for a total of $200 million for the first nine months of 1993.
 In August 1993, Bethlehem completed an offering of $105 million of 10-3/8 percent Senior Notes due 2003. The proceeds are being used to finance the construction of a coal injection facility at the Burns Harbor Division which will make this Division even more competitive by lowering its operating costs through elimination of the consumption of natural gas and reduction in the use of coke in the blast furnaces.
 At Sept. 30, 1993, $294 million was available for borrowing under Bethlehem's 1992 revolving credit agreement.
 CAPITAL EXPENDITURES
 Capital expenditures were $240 million during the first nine months of 1993 compared to $263 million during the year earlier period. We currently estimate that capital expenditures will be about $350 million in 1993 compared to $329 million in 1992. Capital expenditures for 1993 include about $55 million for the coal injection facility at Burns Harbor.
 Capital expenditures are expected to increase in 1994 and will include the following projects: rebuild of a coke oven battery, reline of a blast furnace and construction of the coal injection facility at Burns Harbor; completion of the modernization program for Pennsylvania Steel Technologies; and expenditures for the modernization project at Bethlehem Structural Products Corporation.
 DIVIDENDS
 The Board of Directors today declared dividends of $1.25 per share on Bethlehem's $5.00 Cumulative Convertible Preferred Stock, $0.625 per share on Bethlehem's $2.50 Cumulative Convertible Preferred Stock and $0.875 per share on Bethlehem's $3.50 Cumulative Convertible Preferred Stock, each payable Dec. 10, 1993, to holders of record on Nov. 10, 1993. No dividend was declared on Bethlehem's Common Stock.
 PUBLIC POLICY ISSUES
 Barnette said: "There are a number of pending public policy issues that are vital to the steel industry's future success. They include International Trade and Health Care Reform.
 "With respect to International Steel Trade, it is essential that it be fair. The recent round of unfair trade cases resulted in significant but only partial relief for U.S. steelmakers. Bethlehem and five other leading domestic steel producers have filed appeals in 42 countervailing and antidumping duty cases, primarily involving hot and cold-rolled steel products, in which the International Trade Commission issued negative injury determinations in July. We believe those negative determinations are contrary to the facts and the law. We are also vigorously defending appeals brought by foreign producers in the 30 cases, primarily involving corrosion resistant sheet and plate products, where the ITC found that unfairly traded imports had caused injury to U.S. producers. In addition, we are asking our government to take appropriate actions with respect to dumped and subsidized foreign steel.
 "We continue to work with the Clinton Administration and Congress to ensure that U.S. trade laws are not impaired. We support a successful completion to the Uruguay Round including correction of the defects in the Dunkel draft and a comprehensive, effective and enforceable Multilateral Steel Agreement that does not limit the ability of domestic industries to utilize the trade laws to counter the effects of unfair trade. Bethlehem's customers support the North American Free Trade Agreement and, as a customer-driven company, Bethlehem supports its customers on this issue.
 "With respect to Health Care Reform, comprehensive legislation must be enacted promptly. Health care costs are a major expense for Bethlehem. Our quarterly expense for providing health care benefits for active employees, retirees and their dependents is approximately $60 million. Bethlehem supports the basic principles of comprehensive Health Care Reform outlined by the President and the First Lady, and we are encouraged by the clear signs that Republican and Democratic leaders in Congress are intent on achieving reform."
 OUTLOOK
 With respect to the business outlook for Bethlehem, Barnette said: "We continue to see encouraging signs of a moderate recovery in both the general economy and most of our markets. Orders for light flat rolled products remain at moderately strong levels. We do not believe that there will be a disruptive surge of steel imports as a result of the recent ITC ruling. Europe's and Japan's economies should gradually emerge from recession to join other expanding economies and produce stronger global steel demand in 1994. The near-term U.S. business outlook is for slow growth, low inflation and continued competitive pressures yielding only a slight rise in domestic industry shipments from 86 million tons this year to 87 million tons in 1994.
 "We will continue to focus on our customers' needs, reduce costs, increase sales of higher margin products, modernize our operations, improve quality and customer service and move towards a leaner, more decentralized organization. These actions, as well as moderate improvement in key steel markets and achieving fair trade in steel, should enable Bethlehem to be profitable in the fourth quarter of 1993."
 BETHLEHEM STEEL CORPORATION
 Consolidated Statements of Income
 (dollars and shares in millions, except per share data)
 (Unaudited)
 Three Months Nine Months
 Ended Sept. 30 Ended Sept. 30
 1993 1992 1993 1992
 NET SALES $1,055.3 $1,007.8 $3,193.1 $3,017.5
 Cost and Expenses:
 Cost of Sales 926.4 960.9 2,873.0 2,839.3
 Depreciation 69.1 66.9 206.3 197.5
 Selling and general
 administration
 expense 38.4 38.2 116.7 116.9
 TOTAL COSTS AND
 EXPENSES 1,033.9 1,066.0 3,196.9 3,153.7
 Income (Loss)
 from Operations 21.4 (58.2) (3.8) (136.2)
 Financing Income (Expense):
 Interest and other
 financing costs (15.8) (13.1) (48.0) (43.5)
 Interest and other
 income 1.6 1.1 5.1 3.5
 Income (Loss)
 Before Income Taxes
 and Cumulative Effect
 Of Changes In
 Accounting
 Principles 7.2 (70.2) (46.7) (176.2)
 Benefit for Income
 Taxes 24.0 12.0 31.3 30.0
 Income (Loss)
 Before Cumulative
 Effect Of Changes
 In Accounting
 Principles 31.2 (58.2) (15.4) (146.2)
 Cumulative Effect
 of Changes in
 Accounting
 Principles --- --- --- (250.0)
 Net Income (Loss) 31.2 (58.2) (15.4) (396.2)
 Dividend Requirements
 for Preferred and
 Preference Stock 10.6 5.8 29.0 18.1
 Net Income (Loss)
 Applicable To
 Common Stock $20.6 $(64.0) $(44.4) $(414.3)
 Per Common Share Amounts:
 Income (Loss)
 Before Cumulative
 Effect of Changes
 in Accounting
 Principles $0.23 $(0.76) $(0.49) $(2.08)
 Net Loss $0.23 $(0.76) $(0.49) $(5.24)
 Average primary
 shares
 outstanding 91.1 84.3 90.8 79.1
 Shipments,
 Basic Steel Operations
 (thousands of net
 tons) 2,160 2,101 6,669 6,371
 Raw Steel Production,
 Basic Steel Operations
 (thousands of net
 tons) 2,629 2,446 7,587 7,432
 /delval/
 -0- 10/27/93
 /CONTACT: Henry Von Spreckelsen of Bethlehem Steel, 215-694-3711/
 (BS)


CO: Bethlehem Steel Corporation ST: Pennsylvania IN: MNG SU: ERN DIV

JM -- PH019 -- 7261 10/27/93 11:58 EDT
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Date:Oct 27, 1993
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