Inland Steel Industries Inc. said Thursday that a strong fourth-quarter rebound in its steel unit boosted results for 1986 into the black for the first time in five years.
The Chicago-based company forecast bigger profits in 1987, in part because of a continuing cost-cutting effort that will include unspecified cuts in employment.
Inland posted fourth-quarter earnings of $30.2 million, or 95 cents a share, compared with a $90.5 million loss a year earlier. Sales rose 14.1 percent to $817.6 million from $716.4 million a year earlier.
Results for the quarter benefited from a $9.5 million gain from the year- end sale of Inland`s Loop headquarters to a Maryland partnership and a $16.5 million gain from the sale of its coal properties. The company will lease a portion of its office building at 30 W. Monroe St.
For the full year, Inland posted its first annual profit since 1981, $19.3 million, or 40 cents a share, compared with a $178.4 million loss in 1985. The 1985 results included unusual charges of $114.3 million. Sales for the year increased 5.8 percent to $3.17 billion from $3 billion in 1985.
The company would have posted a net loss for the quarter and year except for an inventory liquidation that reduced its cost of goods sold by $64 million.
At a press conference, Frank W. Luerssen, Inland`s chairman and chief executive, credited cost-cutting for the turnaround in its integrated steel operations.
The steel unit posted an operating profit of $41.4 million in the quarter, compared with a loss of $32.1 million a year earlier, as shipments rose 9 percent. For the year, the unit had an operating profit of $95.5 million, compared with a loss of $29.1 million in 1985. Shipments rose 3.8 percent.
Luerssen said Inland, with advice from Japan`s Nippon Steel Corp., cut costs at Indiana Harbor Works, its lone steel mill, in East Chicago, Ind., by an inflation-adjusted 9.5 percent last year.
Inland, which in 1985 set out to cut costs by 20 percent over three years, has targeted additional cuts of 6 to 7 percent in 1987. To help meet that target, the company will cut employment further at Indiana Harbor and its Loop headquarters this year, Luerssen said, though he didn`t elaborate.
Inland`s steel unit cut its employment 8 percent, to about 15,500 people, last year, a spokesman said.
The record long strike at USX Corp., the nation`s largest steelmaker, helped Inland`s fourth-quarter results, but not to a large degree ”so far as we can determine,” Luerssen said.
Inland`s one bright spot in recent years, the Joseph T. Ryerson & Son Inc. steel service unit, posted an operating loss of $2.1 million in the quarter, compared with a $9.5 million profit a year earlier. For the year, Ryerson`s operating profit plunged 63 percent despite an increase in sales.
Luerssen said he expects 1987 earnings to exceed last year`s profit of $19.3 million, but he declined to be specific other than to say the 1987 results will include about a $50 million investment tax credit.
Luerssen said steel prices fell last year an average of 4 percent below depressed 1985 levels. He expects only ”a very modest” increase in 1987.
In addition to the fourth-quarter gain of $9.5 million, the sale of its headquarters at 30 W. Monroe St. will result in deferred profit of $16 million in the next 15 years, the company said. Inland will lease a portion of the building, which it sold to a partnership that includes Towson, Md.-based Townsend Co. and Townsend principals.
