Armco Manages Sharp Turnaround in Quarter

Buoyed by a turnaround in its carbon steel business and a hefty investment tax credit, Armco reported a first-quarter profit of $52.5 million on higher revenue, compared to a loss of $62.9 million a year ago.

Armco, a steel and oil field equipment maker based in Parsippany, N.J., said revenue during the quarter ended March 31 increased 6.8% to $727.8 million.

Armco said increased demand from auto and appliance manufacturers boosted quarterly carbon steel sales 22%. Operating profit for the carbon steel segment shot up to $32.7 million from $2.8 million.

The first-quarter figures also reflect a $41.7-million investment tax credit realized under the new tax law.

Armco said operating profit in its specialty steel segments fell to $9.8 million from $12.9 million in the same quarter of 1986. The decline in profit was a result of lower electrical steel prices, lower margins on semi-finished shipments and an increase in operating costs.

Armco’s oil drilling equipment segment posted an operating loss of $3.6 million for the quarter, compared to a $3.9 million loss in the like quarter in 1986.