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Financial experience of U.S. producers

Overall operations of the establishments or divisions.—Ten producers of hot-rolled carbon steel plate provided profit-and-loss data relative to the overall operations of the establishments or divisions within which such merchandise is produced. Net sales by these producers increased from $14.4 billion in 1978 to $17.4 billion in 1979, and then fell to $14.9 billion in 1980 (table 15). Net sales rose to $13.6 billion during the partial accounting year ending in September 1981 (partial year 1981), topping net sales in the corresponding period of 1980 by $2.7 billion, or 25 percent. In the aggregate, the 10 firms derived about 14 percent of their overall establishment or division sales revenue from the sale of hot-rolled carbon steel plate in 1978 and 1979, 17 percent in 1980, and 15 percent in partial year 1981.

The 10 firms reported an aggregate operating profit of $242 million, or 1.7 percent of net sales, in 1978. Such profit plunged to $78 million, or 0.4 percent of net sales, in 1979, and in 1980, the 10 firms sustained an aggregate loss of $511 million, equal to 3.4 percent of net sales. Operating profit climbed to $116 million during partial year 1981, compared with an operating loss of $505 million during the corresponding period of 1980. The partial year 1980 operating loss was equal to 4.7 percent of net sales, and the partial year 1981 operating profit was equal to 0.9 percent of net sales. Operating losses were experienced by two firms in 1978, three firms in 1979, five in 1980, and three in partial year 1981.

The ratio of cost of goods sold to net sales rose from 96 percent in 1978 to 101 percent in 1980, indicating that, in the aggregate, the 10 films sold a share of their products at less than cost during the latter year. In partial year 1981, the ratio of cost of goods sold to net sales declined to 97 percent.

Operations on hot-rolled carbon steel plate.—The 10 firms which furnished profit-and-loss data accounted for about 91 percent of total U.S. producers' shipments of hot-rolled carbon steel plate in 1980. Their net sales of hot-rolled carbon steel plate rose from $2.1 billion in 1978 to $2.5 billion in 1980, representing an increase of 21 percent (table 16). In partial year 1981, net sales were up $174 million, or 9 percent, over the $1.9 billion net sales recorded during the corresponding period of 1980.

The 10 firms' aggregate operations on hot-rolled carbon steel plate were profitable during 1978-80 and partial year 1981. Their aggregate operating profit was rather meager, however, especially in 1980. 1/ The 10 firms earned an operating profit of $84 million and $92 million in 1978 and 1979, respectively. Such profit fell sharply to $34 million in 1980. In partial year 1981, the 10 firms recorded an operating profit of $64 million, compared with $9 million in the corresponding period of 1980.

1/ The Commission's questionnaires also requested data on net profit before income taxes. However, several firms failed to submit data relative to their interest expense and other nonoperating expenses and income. If such data were available, they probably would show that the 10 firms' operations on hot-rolled carbon steel plate were unprofitable (on the basis of net income or loss before income taxes) in 1980.

Table 15.—Profit-and-loss experience of 10 U.S. producers on the overall operations of their
establishments or divisions within which carbon steel plate was produced, accounting years
198-80, partial accounting year ending in September 1580, and partial accounting year ending
in September 1981

[table]

Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission.

Note—Because of rounding, figures may not add to the totals shown. Note—Because of rounding, figures may not add to the totals shown.

Table 16.—ProfIt-and-loss experience of 10 U.S. producers on their operations producing carbon steel plate, accounting years 1978-80, partial accounting year ending in September 1980, and partial accounting year ending in September 1981

[table]

Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission.

Operating profits realized by the domestic industry producing hot-rolled carbon steel plate, as measured by the ratio of operating profit to net sales, were considerably less during 1978-80 and partial year 1981 than profits realized by most U.S. manufacturing firms. The following tabulation compares operating profit ratios for the 10 producers of hot-rolled carbon steel plate with comparable profit ratios for all U.S. manufacturing firms (in percent):

Ratio of net operating profit to net sales
Hot-rolled carbon All U.S.

steel plate manufacturing 1/

1978 4.0 8.1

1979 3.7 7.7

1980 1.4 6.8

1981 2] 3.1 3/ 7.2

1/ Obtained from Federal Trade Commission Quarterly Reports.
2/ Partial accounting year ending in September 1981.
3/ January-June.

Regional profit-and-loss data relative to nine firms' hot-rolled carbon steel plate operations are shown in table 17. Production facilities located in the Northeastern area of the United States accounted for 70 percent of the nine firms' aggregate 1980 net sales of carbon steel plate. Facilities located in the Southeastern area accounted for *** percent of aggregate net sales, and those located in the Western area accounted for *** percent of sales. Carbon steel plate operations in the Northeastern and Southeastern areas were profitable in each of the reporting periods, although profit margins were rather small in some years. The two establishments in the Western area reported an aggregate * * * in 1978, and in I960, they * * *.

Table 17.—Frofit-and-loss experience of nine U.S. producers on their operations producing
carbon steel plate, by areas in which their production facilities are located, 1/
accounting years 198-80, partial accounting year ending in September 19 0, and partial
accounting year ending in September 1981

[table]

1/ The areas are shown in the map on page A-12.

Source: Compiled from data submitted in response to questionnaires of the U.S. International
Trade Commission.

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