POSCO, South Korea's top steelmaker, has reported a loss for the third quarter of the year but is positioned to bottom out on the back of cost-cutting measures and simmering signs of a rebound in steel prices, analysts said Wednesday.

Its consolidated net loss amounted to 658.24 billion won ($582.5 million) during the July-September period, compared with a profit of 224 billion won a year earlier, as the company was hit by foreign exchange losses, a legal settlement and weak steel prices amid a supply glut.

The third-quarter figure marks the second quarterly loss since the fourth quarter of last year.

Operating profit also slipped 5 percent on-year to 651.91 billion won in the three-month period, and sales also retreated 7.9 percent to 13.99 trillion won.

"The quarterly loss was far greater than the market estimate; it's really an earnings shock," said Kang Hyun-tae, an analyst at KTB Investment & Securities.

Global steelmakers have been struggling with a supply glut caused by weak demand stemming from a slump in the global economy and an influx of low-priced Chinese products.

Amid concerns over a prolonged slump in steel prices, POSCO has been swayed by a series of scandals involving its former CEO and a slew of corporate takeovers, sending its stock prices to multiyear lows.

But POSCO has been responding with a mix of high-end products to cushion the fallout of oversupply and streamline its business portfolio, which helped the steelmaker boost its profitability.

POSCO's operating income to sales ratio stood at 4.7 percent for the third quarter, up 0.2 percentage point from the previous quarter.

In July, POSCO also unveiled a set of measures to restructure its business lineup and focus on its flagship business -- steelmaking. It has been seeking to sell money-losing overseas assets while reducing divisions to cope with falling demand and rising costs.

Analysts said POSCO's bottom line may improve to some degree as prices of iron ore are expected to remain low throughout this year and a global supply glut is also likely to ease somewhat in the face of a slowdown in China's demand.

"A slight rebound in steel prices are cautiously expected, and steel demand from major economies is showing signs of a recovery," said a POSCO official.

China's quarterly economic growth slumped to multiyear lows during the third quarter, prodding its government to increase spending on infrastructure projects to alleviate the glut problem.

"Part of the third-quarter loss was caused by external factors, and going forward, POSCO's earnings may improve down the road, probably after the fourth quarter," said Jeon Seung-hoon, an analyst at KDB-Daewoo Securities.

Analysts said it is difficult to predict accurate figures coming from non-operating business activities as the company is currently undergoing investigations over malpractice.

"But it is highly likely to see an improvement in its earnings down the road on the back of its continued restructuring efforts to beef up financial status," said Park Jong-kuk, an analyst at Kiwoom Securities. (Yonhap)