Dofasco Inc. announced that it expects its consolidated earnings for the third quarter of 2005 to be significantly lower than the surveyed analyst range of $0.54 to $1.21 per common share.

The company notes that revenue from its Hamilton operations has decreased significantly for the first two months of the third quarter, driven by lower spot pricing and the negative impact of the stronger Canadian dollar. In addition, shipments for the quarter-to-date were below the company's previous expectations due to continued customer inventory draw-down and lower production levels resulting from some short-term operating interruptions which have been resolved.

Dofasco also expects cost per ton to be higher than in the second quarter because of lower production levels and increased usage of purchased slabs (which were bought at the peak of the market). The current expectation is that Hamilton will post a small loss for the quarter. At Gallatin, Dofasco’s previous guidance for a lower third quarter remains the same.

Quebec Cartier Mining (QCM) is operating at the level anticipated at the time of acquisition, and cash flow is in line with forecasts. However, the process of allocating the purchase price to QCM's assets and liabilities is currently expected to result in Dofasco's earnings per share being positively impacted by QCM's earnings for approximately four weeks as compared to the six-week period originally estimated.

Dofasco's President and CEO Don Pether said, "We are seeing positive indications looking forward on market pricing and have been making a concerted effort to mitigate pressures on the cost side. Under these conditions, we expect improvement in the fourth quarter."

Dofasco is a leading North American steel solutions provider. Product lines include hot rolled, cold rolled, galvanized, Extragal^(TM), Galvalume^(TM) and tinplate flat rolled steels, as well as tubular products, laser-welded blanks and Zyplex^(TM), a proprietary laminate. Dofasco's wide range of steel products is sold to customers in the automotive, construction, energy, manufacturing, pipe and tube, appliance, packaging and steel distribution industries.