West Chester Township-based AK Steel warned investors Monday that it expects a net loss of between $0.33 and $0.38 per diluted share of common stock for the second quarter of 2013.
In April, AK Steel reported a net loss of $9.9 million or 7 cents per share in the first quarter. In January, the steelmaker reported a net loss of $1,027.3 million or $9.06 per diluted share for 2012. In 2011, it reported a loss of $155.6 million or $1.41 per share.
The company also expects its average selling price per ton for the second quarter of 2013 to decrease by approximately 1 percent from its price for the first quarter of 2013, falling from $1,063 to $1,055 per ton.
The expected decrease in average selling price is primarily due to lower spot market prices for carbon steel products compared to the previous quarter, according to AK Steel.
Second quarter results include the effect of the a seven-day maintenance outage at its Middletown blast furnace, which will drive up the company’s maintenance costs to $21 million for the second quarter. The company spent $1 million in total maintenance outage costs in the first quarter and does not have any other planned blast furnace maintenance outages for the reminder of 2013.
Also in Monday’s release, AK Steel said that it expects shipments of approximately 1,340,000 to 1,360,000 tons in the second quarter of 2013 compared to shipments of 1,289,800 tons in the first quarter of 2013, a increase of approximately 4 to 5 percent.
AK Steel Holding Corp. posted a smaller first quarter loss as the firm benefited from lower costs for raw materials in a struggling domestic steel market.
The West Chester Township-based steelmaker said Tuesday it had a net loss of $9.9 million, or 7 cents per share. One year ago, AK Steel lost $11.8 million, or 11 cents per share.
Revenue fell 9 percent to $1.4 billion in revenue. Steel shipments dipped 3 percent to nearly 1.3 million in the quarter. The average selling price in the first quarter was $1,062 per ton, which was down 7 percent from a year ago, but up 5 percent from the fourth quarter.
AK Steel President and Chief Executive Officer James Wainscott said $33.2 million operating profit in the first quarter reflects progress for the company. One year earlier, the company had a $4.1 million operating profit.
Wainscott said the company benefited from higher shipments to the automotive market, a higher-priced mix of products sold and lower costs, largely for raw materials such as iron ore, coal, carbon scrap and coke. However, he said global steelmaking capacity continues to exceed demand.
Mills want to boost prices now because steel users and service centers should be increasing orders to satisfy based on demand expected from their customers. AK Steel announced a price hike about two weeks ago on flat rolled stainless steel products.
AK Steel said its Middletown blast furnace will have a seven-day maintenance outage in the second quarter, which the company added was the first major one at the facility since 2009. Maintenance outage costs are expected to be $20 million higher than the first quarter as a result.
AK Steel was up as high as 6 percent in premarket trading as analysts expected the firm to post a larger loss per share. Shares traded at $2.94, up 2 cents or about 1 percent, in early morning trading.
AK Steel Holding Corp. said Friday it expects to post a net loss of between 9 cents and 13 cents per share in the first quarter.
The West Chester Township-based parent of AK Steel said it is dealing with lower levels of steel shipments and below average spot market demand compared to the fourth quarter.
AK Steel had a net loss of $11.8 million, or 11 cents per share, in the first quarter of 2012 and a net loss of $230.4 million, or $1.89 per share, in the fourth quarter of 2012.
Steel shipments are expected to be down at least 7.5 percent from the previous quarter to 1.275 million and 1.3 million tons of steel. Shipments to the automotive industry are expected to be higher in the first three months of the year, compared to the last three months of 2012.
Normally, demand on the spot market improves in the first quarter as manufacturers and service centers ramp up orders for steel goods used in the production of items such as refrigerators, automobiles, tools and tractors.
The average selling price per ton of steel in the first quarter is expected to rise 5 percent to $1,060 per ton from the fourth quarter. The company said this was the result of selling a larger volume of higher priced products during the quarter. The average price the company captured per ton of steel in 2011 and 2012 was $1,131 and $1,092, respectively.
Lower raw material costs are expected to contribute to the company having lower overall costs in the quarter.
AK Steel said that it expects a noncash tax benefit of about $4 million to $5 million in the first quarter from a valuation change in a deferred tax asset.
Shares of some U.S. steel manufacturers rose Tuesday, a day after West Chester-based AK Steel Holding Corp. imposed a $50 per ton increase in spot market base prices for carbon flat-rolled steel used in such products as automobiles and appliances.
AK Steel said Monday that the increase was effective immediately on new orders.
The company’s announcement followed a $40-per-short-ton increase imposed in mid-October by United States Steel Corp. AK Steel, Nucor and other U.S. major steel manufacturers matched the U.S. Steel increase.
Steel manufacturers have struggled because of the slower global economy, which has cut into demand while supplies have grown because of imports and new U.S. facilities that have opened. That put pressure on steel prices.
Steel manufacturers are expecting an increase in the cost of scrap, an iron-containing material that can be recast into new steel products, Morningstar Inc. analyst Bridget Freas said. That could be one reason for AK Steel’s second price increase in such a short period.
In addition, the companies are heading into a season when steel prices typically are higher, from December through March, she said.
In a telephone interview, the analyst said she wasn’t sure if other manufacturers would match the AK Steel’s increase. Despite the rise in scrap prices and seasonal trends, there hasn’t been a recent increase in demand, she said.
Freas estimated the prevailing steel price between $600 per ton to $620 per ton.
AK Steel closed up 6.39 percent on Tuesday to $5.66.
AK Steel Holding Corp. said Tuesday that its third-quarter loss widened to $60.9 million, as steel prices dropped.
The results fell significantly short of Wall Street predictions and AK Steel shares tumbled in morning trading.
The West Chester, Ohio-based company’s loss amounted to 55 cents per share compared with a loss of $3.5 million, or 3 cents per share, a year ago.
Revenue fell 7.7 percent to $1.46 billion.
Analysts, on average, expected a loss of 35 cents per share on $1.48 billion in revenue, according to FactSet.
Steel shipments were flat at about 1.4 million tons, and the selling price per ton fell 7.3 percent to $1,073 per ton.
AK Steel said that tough economic conditions around the world continue to hurt steel shipping volumes and prices. In addition, the company said it continues to deal with some higher-cost raw material inventories.
“Challenging domestic and global economic conditions continue to weigh on shipping volumes and prices,” said James L. Wainscott, chairman, president and CEO of AK Steel, in a statement. “Additionally, while we expect to enjoy lower raw material costs in the future, we are still working through some higher cost raw material inventories.”
AK Steel didn’t release specific fourth-quarter guidance, but said it expects to post a loss. Analysts expect a loss of 11 cents per share for the quarter.
AK Steel shares surged 7.5 percent Monday after the West Chester-based company announced it will increase current spot market prices for carbon flat-rolled steel products by $30 per ton, effective immediately.
The steel industry has struggled to deal with declining demand in the slow global economy, higher raw-material costs in some cases and plentiful supplies. AK Steel shares closed on Monday at $5.28, up 37 cents.
AK Steel on Tuesday reported a net loss of $724.2 million for the second quarter, or $6.55 a share, and announced that it will suspend its dividend, which it says will save $22 million a year.
The company has paid a quarterly dividend of 5 cents a share.
The results were impacted by a non-cash charge of $736 million for a valuation allowance for the company’s deferred tax assets, the company said.
Excluding the charge, the company said adjusted net income for the quarter was $11.4 million, an improvement over the net loss of $11.8 million during the first quarter. AK Steel reported income of $33.1 million in the second quarter a year ago.
Net sales for the quarter fell to $1.5 billion on shipments 1.3 million tons, compared to $1.8 billion on shipments of 1.5 million tons. The company said its average selling price for the second quarter was $1,152 per ton, a 1 percent increase over the first quarter of 2012, and about 3 percent lower than the second quarter of 2011.
“During the second quarter, sluggish domestic and global economic conditions impacted shipment volumes and selling prices for our steel products,” said James L. Wainscott, chairman, president and CEO of AK Steel, in a statement.
“Despite these market challenges, AK Steel recorded an improved operating profit and adjusted net income performance compared to the previous quarter.”
To let West Chester and Liberty Township residents catch up with the news that they need to know, WestChesterBuzz.com will list and link to all of last week’s top local stories every Monday.
Beckett Park opens its west side after $2 million upgrade – The west side portion of Beckett Park officially reopened June 29 after a $2.09 million upgrade that included the construction of a new shelter, a “natural” playground, a small pond that can used as an ice skating rink in the winter and a 1.25-mile trail that loops around two newly enlarged lakes. Beckett Park is 150 acres and straddles Beckett Road near the Union Centre Boulevard intersection. WestChesterBuzz.com got its first look at the upgrade to the park last week.
Brad Lovell. Photo provided.
Lakota names four new principals- Lakota officials recently announced that the school district will be adding new principals to four different schools following approval by the board of education. New principals include Brad Lovell (Creekside Early Childhood), Christina French (Hopewell Elementary), Stacy Millburg (Lakota East Freshman – associate principal) and Jason Jackson (Lakota West Freshman – associate principal).
AK Steel to cut 2013 pension contribution – Bloomberg News reported last week that West Chester-based AK Steel Holding Corp., will cut its estimated 2013 pension expense by one-third, or $100 million, after passage of a transportation bill extension lowered some required contributions. The bill stabilizes the minimum annual contributions to fund defined-benefit pension plans, while raising premiums paid to the Pension Benefit Guaranty Corp., AK said.
Brennan Ryan. Photo provided.
Lakota West hires Brennan Ryan to lead wrestling program- The Lakota school district’s high school athletic department announced last Monday that it hired Brennan Ryan as its new head coach of the Lakota West wrestling program. Ryan, who has experience as a wrestling head coach at Roger Bacon and Madeira high schools, was hired to replace Tim Kessler.
Battelle for Kids honors 18 Lakota teachers – A total of 18 Lakota educators were recognized in late June for teaching excellence at the Ohio Educators Connect for Success Conference in Columbus, Lakota officials announced last Wednesday. Battelle for Kids honored the local educators as part of its “Celebrate Teaching” initiative that is used to find out what makes a teacher highly effective and how to best learn from their practices.
VOA Museum. Tony Jones/photo.
National VOA Museum gears up for tours – With the recent completion of some significant construction work, the National VOA Museum of Broadcasting announced that it will open for tours on the third Saturday of each month from 1 to 4 p.m. starting July 21.
West Chester Library breaks checkout record – The West Chester location of the MidPointe Library System broke its previous record for checkouts in a month this past June. The local library announced last week that it had 136,512 items checked out last month, trumping its old record set in July of 2008 by more than 4,000 checkouts.
List: Reach Out Lakota back-to-school supply needs – Reach Out Lakota released its supply list for its annual Back to School program last Wednesday. Currently, only a small percent of the needed supplies have been donated for the more than 450 registered children in the Lakota school district.
Jay Bruce. Adam Kiefaber/photo.
Photos: Jay Bruce signing in West Chester – Less than a week from the Major League All-Star game, Cincinnati Reds outfielder Jay Bruce took time for an autograph session at the Sports Gallery in West Chester Sunday. Hundreds of fans packed the local sports memorabilia shop to get a glimpse and have their photo taken with the two-time MLB All-Star.
Photos: Crazy Cardboard Boat Regatta in West Chester – Tony Jones of The Cincinnati Enquirer photographed one of West Chester Township’s largest outdoor events this past weekend. Additional photos from the community will be posted on WestChesterBuzz.com later this week.
West Chester-based AK Steel Holding Corp., will cut its estimated 2013 pension expense by one-third, or $100 million, after passage of a transportation bill extension lowered some required contributions.
AK Steel will pay $200 million into its pension fund in 2013 after the Surface Transportation Extension Act of 2012 was signed into law on July 6, the company said on Monday in a filing with the Securities & Exchange Commission.
The bill stabilizes the minimum annual contributions to fund defined-benefit pension plans, while raising premiums paid to the Pension Benefit Guaranty Corp., AK said.
Standard & Poor’s Ratings Services downgraded AK Steel’s credit rating to B+, or four levels below investment grade, on June 29. “Weak” results at AK won’t recover in the next several quarters because of the steelmaker’s high fixed costs and lower prices than expected for the metal, the ratings company said.
The company is also canceling a $310 million co-generation plant in Middletown. AK Steel told the Hamilton Journal News that current prices made it cheaper for the company to buy electricity than generate it.
“It’s unfortunate it didn’t work out, but also it’s strictly economics,” said Barry Racey, AK Steel spokesman, told the paper. “Cogeneration is a good technology and it’s good for the environment and it’s good as an alternate way of generating electricity and steam, in our case.”
AK Steel closed on Monday down 2 cents to $6.12. The company raised its price for its flat steel products by $40 a ton on July 6. It reports quarterly earnings on July 24.
West Chester firm’s prediction is about half of analysts’ expectations, 4 to 6 cents a share
West Chester-based AK Steel Holding Corp. on Monday projected a profit for the current quarter below current Wall Street predictions.
The steel maker said it expects to post second-quarter net income of between 4 cents and 6 cents per share, while analysts polled by FactSet expect earnings of 11 cents per share.
AK Steel said its prediction is based on expectations that its steel shipments will total about 1.4 million tons for the quarter, which would mark a slight increase from first-quarter levels, and that its average per-ton selling price would be about equal to first-quarter levels.
Steel makers have struggled this year as a result of global economic uncertainty and the continued slump in the construction industry. At the same time, U.S. companies have been forced to compete with an influx of cheaper imported steel products.
AK Steel said its profit prediction also takes into account the possibility that it will have to record a valuation allowance for its deferred tax assets.
At the same time, the company said it expects to get a boost from higher operating rates and lower raw material costs compared with the first quarter of this year.
As a result of heightened uncertainty and volatility surrounding economic conditions in the U.S. and other markets, AK Steel said it couldn’t provide a profit prediction for the rest of 2012.
The company also said Monday that it may be able to obtain iron ore pellets from its Magnetation LLC joint venture earlier than 2015, as it had previously predicted.
And AK Steel said that it is optimistic that it is ahead of schedule to produce coal from its AK Coal Resources Inc. subsidiary, which is in the process of developing its mining operations.
AK Steel shares fell 15 cents, or 2.82 percent, to $5.17 in trading Monday. They are still up from their 52-week low of $4.59 per share last Tuesday. The high for the year was $16.75 in July.