INTERNATIONAL STEEL GROUP Company expects bigger profits for year

ISG expects to issue profit-sharing checks soon.
CLEVELAND (AP) -- Rising costs for materials used to make steel will lead to higher prices and bigger profits this fiscal year at International Steel Group Inc., the company says.
The Cleveland steel giant said its pending acquisition of Weirton Steel Corp. should contribute to a better balance sheet in upcoming quarters. ISG hopes to profit from selling tin made at the West Virginia firm.
The company also said Thursday that it expects to start sharing profit with employees by midyear and will make contributions to a retiree health-care trust fund within weeks.
ISG executives made the comments after releasing fourth-quarter earnings, the first earnings report since the company went public in December. It reported profits of $24.9 million, or 28 cents per share on sales of $1.4 billion, or 3.5 million tons of steel.
For 2003
For all of 2003, when its Bethlehem Steel acquisition led to $70.3 million in charges, ISG lost $23.5 million, or 31 cents per share, on sales of $4.1 billion.
The company had earnings of $43 million, or 62 cents a share in the same period a year ago, but comparisons with 2002 would lack meaning because ISG wasn't in existence for the full year, the company said.
The first payments from the profit-sharing plan should be triggered in the first half of this year and will go to nearly all 12,000 employees, said Brian Kurtz, ISG vice president of finance.
The company agreed to profit-sharing and contributions to retiree health care as part of its labor agreement with the United Steelworkers of America last year, but the payments were contingent on specific profit levels.
Kurtz said the company paid out bonuses in December to reward employees for a successful fourth quarter, but those were not part of the profit-sharing program. Profit-sharing is based on how much the company makes per ton of steel, using an accounting formula.
The continuous rise of prices for raw materials such as coke, steel scrap and iron ore wouldn't affect ISG as much as other companies, said Rodney Mott, ISG's chief executive. ISG produces much of its raw materials in-house and has stable contracts for the rest, he said. It owns coke plants in Warren and in Burn Harbor, Ind.
Mott also said the company expects to announce soon whether it will restart the basic oxygen furnace and continuous caster on the west end of its Cleveland Works.