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AK Steel Warns of Bigger Losses in Third Quarter, Shares Slide

By  +Follow September 20, 2013 7:55AM
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On September 9, AK Steel (AKS) said that it will be releasing the results from its third quarter before the markets open on October 22.  After the closing bell on Thursday, the producer of flat-rolled carbon, stainless and electrical steels provided outlook for the quarter, warning of a wider-than-expected loss.

West Chester, Ohio-based AK Steel said that it sees a net loss in the range of 22 cents to 27 cents, in part because of an unplanned outage at a Middletown, Ohio blast furnace that cost the company $12 million, or 9 cents per share, in profits, after recovering a portion of the losses through insurance.  Analysts were expected a loss of only 11 cents per share for the third quarter.

The company also said it anticipates more losses to be incurred and insurance recoveries in the fourth quarter related to the blast furnace outage.

In the second quarter, the steelmaker took a charge of $21.6 million related to a planned maintenance shutdown on the Middletown Works blast furnace and was also hit by a $6.2 million expense with the unplanned mechanical failure in June.  Costs associated with planned outages during the third quarter are expected to be $5 million, which is far better than the $28.5 million it claimed in Q3 2012.

The blast furnace is the part of the mill where iron ore, fuel and limestone are heated and reduced to make hot metal.  The Middletown plant wasn’t able to produce any new carbon flat-rolled steel during the shutdowns, affecting shipments to customers in carbon spot markets.  The company used existing inventory and used its Butler Works and Ashland Works factories to service customers until the Middletown furnace was restarted in mid-July.

For the third quarter, AK Steel expects shipments between 1.24 million and 1.26 million tons, compared to 1.32 million tones in the second quarter, a decrease of 5 percent to 6 percent.  Automobile factories shutting down for retooling during the quarter also partially account for the reduction in shipments.

Average selling prices are expected to rise mildly, from $1,061 per ton in the second quarter to $1,065 per ton in the third quarter.   In last year’s third quarter, the company shipped 1.36 million tons at an average price of $1,073 per ton.

The automobile industry has been a bright spot for AK Steel, but demand in other components, such as electrical steel, stainless steel and commodity carbon markets, have kept pressure on profits.

Shares of AKS started 2013 simply terrible, plunging from near $5 each to lows of $2.76 in April, but have managed to slowly rise since to pare the losses, despite the unplanned outage and associated costs.  Shares closed Thursday at $4.44, but have sunk back 10 percent to $4.00 in pre-market trading on Friday following Thursday’s guidance release.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for AKS
Trader News Daily
25 Nov 14 13:15:55
Wow http://t.co/PeRPkZkWiw just posted last weeks results. +429%. Crazy. They offer a free trial too. $S $KGC $ANR $AKS $SFUN $AUY
Matt Fanning
25 Nov 14 13:06:34
#FVAM Fund: #ontheday Best: $AKS (non-core, long, decr) +16bps Book: 3% Worst: $RRTS (core-long) -23bps Book: 5% #fundaction (-/+)
James P Worthy
25 Nov 14 13:03:04
$AKS AK Steel Holding Corporation (NYSE:AKS) Shares Suffer Despite 3rd Quarter ... http://t.co/4opinJElRP
vee
25 Nov 14 12:39:45
$AKS in watchlist for tomorrow.
Stock Rocket
25 Nov 14 12:17:26
Thanks to the 5 pro traders at http://t.co/5jbX6mNKQv for an amazing week! My win rate was 80%. So sweet. $DRYS $MJNA $AKS $ARNA
BacardiTrader
25 Nov 14 11:26:02
$AKS volando, marcando compra por Psar @FernandoPM aun la traes ?
Large Void Bot
25 Nov 14 10:00:20
Popular: $LAKE, $XLE, $UGAZ, $AKS, $MAS, $DAL, $THC
FonsieTrader
25 Nov 14 09:43:09
$AKS Still going http://t.co/p092UYDO9O
foolsgold
25 Nov 14 09:26:32
$AKS bullish techs now.
Media Sentiment
25 Nov 14 09:25:00
$AKS received a new alert. Find out why at http://t.co/5lwmDm2SCs #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 280
Analyst Ratings
25 Nov 14 09:21:29
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Stock Rocket
25 Nov 14 09:16:27
Thanks to the 5 pro traders at http://t.co/5jbX6mNKQv for an amazing week! My win rate was 80%. So sweet. $DRYS $MJNA $AKS $ARNA
moderneconomist.com
25 Nov 14 09:11:58
RT @tymorapro: $AKS: At 1WkHIGH=6.68, hits:2, Rng:10%, ch:+3.6%, HFltBO+, 2:3Accel+, tf:0111111, medFlt:174M, HiPctSht[26%:2d], DyVol:4.54M…
Alexander Morris
25 Nov 14 09:05:29
$AKS: At 1WkHIGH=6.68, hits:2, Rng:10%, ch:+3.6%, HFltBO+, 2:3Accel+, tf:0111111, medFlt:174M, HiPctSht[26%:2d], DyVol:4.54M:0.5x:0.2x
Scarface Trader
25 Nov 14 09:02:27
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Trader News Daily
25 Nov 14 08:43:42
Wow http://t.co/PeRPkZkWiw just posted last weeks results. +429%. Crazy. They offer a free trial too. $S $KGC $ANR $AKS $SFUN $AUY
Wall Street
25 Nov 14 08:34:30
http://t.co/iQWRYqnOQl....Top penny stocks, NYSE, and NASDAQ trades from the stock market today. +296% last week. $AAL $ANR $BSBR $AKS
FonsieTrader
25 Nov 14 08:07:21
$AKS Option Alert: AKS Jun 15 $6 Put; 5,002 Traded vs 312 OI
Lucretia
25 Nov 14 07:31:48
$AKS AK Steel Shares Surge On Price Hike http://t.co/bwfWGYEd63
Steve Page
25 Nov 14 07:16:46
$AKS oversold
Steve Page
25 Nov 14 07:14:36
@selling_options Oh that's a nice one. I'm trying to get into $AKS and $JCP with bull calls. Trying to learn the NBBO and how to shop bids
FonsieTrader
25 Nov 14 07:08:48
$AKS Crossed Above its 20EMA! long setup to watch http://t.co/I4XWncPc5J
RC
25 Nov 14 07:01:12
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Dave Neville
25 Nov 14 07:00:09
$AKS up 3.41%
Alexander Morris
25 Nov 14 06:42:09
$AKS: At 1DyHIGH=6.55, hits:1, ch:+1.6%, 0phNewHi+, AtPivR1, 3mMv:+3, tf:0111111, medFlt:174M, HiPctSht[26%:2d], DyVol:433T:0x:0x
Jordan Caroleo
25 Nov 14 06:24:33
Commodities still in play. $CLF $AKS
Jordan Caroleo
25 Nov 14 06:15:47
Good Morning! Watch-list Today: $DGLY $PBR $TENX $CLF $AKS $TSL $LAKE $CYBR $CLDX $ARIA
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25 Nov 14 05:23:13
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25 Nov 14 05:00:06
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Dave
25 Nov 14 04:45:32
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Don Fishback
25 Nov 14 04:32:41
1 Day Decrease in ATM IV (Point change) $ARCP, $EMES, $EXAS, $LGF, $AKS http://t.co/oEb41I2u9Z
OptionApps
25 Nov 14 04:32:41
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PennyStocker
25 Nov 14 03:41:56
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Sleek Money
25 Nov 14 03:29:30
AK Steel Holding Given Neutral Rating at Zacks $AKS http://t.co/TPJKM5eQED
Mark Trader
25 Nov 14 03:00:25
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25 Nov 14 02:16:52
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25 Nov 14 00:42:09
Thanks to the 5 pro traders at http://t.co/5jbX6mNKQv for an amazing week! My win rate was 80%. So sweet. $DRYS $MJNA $AKS $ARNA
PennyStocker
25 Nov 14 00:18:16
$ELED is breaking out of bullish flag pattern today. Could be a big couple days here. $AAL $ANR $BSBR $AKS
Wall Street
25 Nov 14 00:18:03
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24 Nov 14 23:09:25
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24 Nov 14 21:54:35
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24 Nov 14 20:32:57
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Trader News Daily
24 Nov 14 19:22:20
Wow http://t.co/PeRPkZkWiw just posted last weeks results. +429%. Crazy. They offer a free trial too. $S $KGC $ANR $AKS $SFUN $AUY
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24 Nov 14 18:37:01
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Wall Street
24 Nov 14 18:10:50
http://t.co/iQWRYqnOQl....Top penny stocks, NYSE, and NASDAQ trades from the stock market today. +296% last week. $AAL $ANR $BSBR $AKS
Stock Rocket
24 Nov 14 18:07:55
Thanks to the 5 pro traders at http://t.co/5jbX6mNKQv for an amazing week! My win rate was 80%. So sweet. $DRYS $MJNA $AKS $ARNA
PennyStocker
24 Nov 14 16:50:03
$ELED is breaking out of bullish flag pattern today. Could be a big couple days here. $AAL $ANR $BSBR $AKS
Mark Trader
24 Nov 14 15:51:20
I banked over 200% in gains during my 14-day trial with http://t.co/6cvEHBeuNR. Their 5 guru traders are amazing. $MDLZ $HAL $GLW $AKS
PennyStocker
24 Nov 14 15:39:42
Wowser $ELED in breakout mode. Going long on the 8k news. $AAL $ANR $BSBR $AKS
PennyStocker
24 Nov 14 15:11:16
$ELED is breaking out of bullish flag pattern today. Could be a big couple days here. $AAL $ANR $BSBR $AKS
				
				
By  +Follow September 20, 2013 7:55AM
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