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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
TradingMyway
16 Sep 14 13:43:02
RT @Briefingcom: $AKS: AK Steel sees recently completed Severstal Dearborn acquisition as accretive to its earnings, and... http://t.co/00J…
Briefing.com
16 Sep 14 13:37:48
$AKS: AK Steel sees recently completed Severstal Dearborn acquisition as accretive to its earnings, and... http://t.co/00Jy96bLhm
US Banking News
16 Sep 14 13:21:40
AK Steel Holding Stock Price Up 4.9% After Analyst Upgrade $AKS http://t.co/BfhGCgKg5W
ldbobby
16 Sep 14 13:18:39
Tomorrow’s watch list: $IFON $SINO $VIMC $VHC $AVNR Secondary - $ACHN $FOLD $AKS $RWLK
James Stefaney
16 Sep 14 12:57:31
$AKS AK Steel sees Severstal Dearborn acquisition accretive to earnings Cowen raises its price target to $11 from $9
Jose Moreno
16 Sep 14 12:52:54
#stocks #trades Alerts from early at the open. $NYNY $IG $AXAS $AKS $SSH $WLDN $IFON $X $FONR $VIMC & many more. All in timeline-pro.
MarketCurrents
16 Sep 14 12:41:29
AK Steel sees Severstal Dearborn acquisition accretive to earnings http://t.co/To3ApRAGgM $AKS
WallStreetConsensus
16 Sep 14 12:20:15
PT Chg 9/16: $CPRX, $TEX, $FI, $AMG, $AKS, $XXIA, $OTIV, $DNKN, $ALR, $EW, $PAYC, $SNI http://t.co/pQIy4SZ4fE
Stock Moo
16 Sep 14 12:00:33
$aks: AK Steel Completes Acquisition of Severstal Dearborn http://t.co/iB9GVeymXT
Large Void Bot
16 Sep 14 12:00:21
Popular: $LRCX, $IYT, $ZU, $NOC, $SHLD, $JNJ, $AKS, $FCX, $SVXY, $CMCM, $EMES
Donald Draper
16 Sep 14 11:55:41
$AKS bounce 9.64. Looking forward to the 11s. BIG news! #draperplay
DK1
16 Sep 14 11:50:13
$AKS there she goes http://t.co/4ZHPX42ixZ
 Luke Murray
16 Sep 14 11:49:16
$AKS out 9.65
Dave Neville
16 Sep 14 11:47:45
AK Steel Completes Acquisition of Severstal Dearborn: PR Newswire http://t.co/RFue24rZiv via @MSN_Money $AKS
 Luke Murray
16 Sep 14 11:43:32
$AKS in 9.69 for 10 move
Jose Moreno
16 Sep 14 11:39:46
$AKS Long from swing at 9.40 and printing green so far
browns
16 Sep 14 11:39:42
Locked $AKS 9.62 +5%
Tuan
16 Sep 14 11:35:28
$AKS in BEAST mode..
4-traders.com
16 Sep 14 11:35:02
AK Steel : Completes Acquisition of Severstal Dearborn http://t.co/L8iYbbPIR2 $AKS
Wu Weed
16 Sep 14 11:34:29
RT @DrapersPicks: All the research this weekend paid off. Take your time, and find good companies! $YHOO $BABA $MBLY $FEYE $AKS $TRUE http:…
The Fly
16 Sep 14 11:34:13
$AKS AK Steel sees Severstal Dearborn acquisition accretive to earnings: Full Story http://t.co/1UxTwPSbjc
NASDAQ
16 Sep 14 11:33:32
$AKS - AK Steel Completes Acquisition of Severstal Dearborn http://t.co/nzWVXdHf3s
VisualStock Resource
16 Sep 14 11:33:17
$AKS - AK Steel Completes Acquisition of Severstal Dearborn http://t.co/6tmW8REXE3
Donald Draper
16 Sep 14 11:26:27
All the research this weekend paid off. Take your time, and find good companies! $YHOO $BABA $MBLY $FEYE $AKS $TRUE http://t.co/CGXyEZImyw
Tuan
16 Sep 14 11:21:24
$AKS finally. Lets do it!
browns
16 Sep 14 11:20:51
$AKS there we go.
FlashRatingsHOT
16 Sep 14 10:25:56
$AKS has 2 analyst ratings in the last 2 days. Median target: $12 (27% upside). View here: https://t.co/mSt5n7JV5N
TheStreet Alerts
16 Sep 14 10:20:05
Why AK Steel $AKS Stock Is Gaining Today http://t.co/JwciythP0r
Donald Draper
16 Sep 14 10:09:28
Satisfied with my short on $RWLK. 90% cash. Looking into $CPL #intraday #draperplay $YHOO $SFTBY $AKS $FLWS
browns
16 Sep 14 10:08:13
$AKS right at resistance. Want a channel break here.
Richard Stewart
16 Sep 14 08:59:57
$AKS added to the watch list. Buying the next pullback, possibly tomorrow
Day Trade Numbers
16 Sep 14 07:37:06
$AKS in range of support and resistance: 9.31 – 9.34 http://t.co/3r25b3uC0c
Alexander Morris
16 Sep 14 06:53:56
$AKS: At 1DyHIGH=9.29, hits:2, ch:+0.9%, News, 0phNearHi:BrkPLo+PHi[+201.0%], tf:3f, FirmTrnd-:+50%, MedFlt[134.4M], HiPctSht[28%:1d]
US Consumer News
16 Sep 14 06:41:44
AK Steel Holding's PT raised by Cowen and Company to $11.00. http://t.co/qv5TxJxFEy $AKS #AKS
Sleek Money
16 Sep 14 06:38:37
AK Steel Holding Price Target Raised to $11.00 at Cowen and Company $AKS http://t.co/CYUUH5YMza
Analyst Ratings
16 Sep 14 06:36:12
AK Steel Holding's PT raised by Cowen and Company to $11.00. http://t.co/Wx3akIBSrO $AKS #AKS
Sleek Money
16 Sep 14 06:21:35
AK Steel Holding Receives Buy Rating from Bank of America $AKS http://t.co/XE7zGtjX8G
Alysia Sarkisian
15 Sep 14 23:54:07
RT @SeekingAlpha: AK Steel - Analysts Remain Bullish, I Remain Cautious http://t.co/J2DhIXKtxr $F #FORD #CARS $AKS
Evener Investment
15 Sep 14 23:51:00
RT @SeekingAlpha: AK Steel - Analysts Remain Bullish, I Remain Cautious http://t.co/J2DhIXKtxr $F #FORD #CARS $AKS
Seeking Alpha
15 Sep 14 23:47:55
AK Steel - Analysts Remain Bullish, I Remain Cautious http://t.co/J2DhIXKtxr $F #FORD #CARS $AKS
Trader News Daily
15 Sep 14 18:23:59
http://t.co/PeRPkYu8Uk ranked #1 for alerts last week with 275% in gains. Related: $PLUG $ABEV $KIOR $ERBB $HEMP $FITX $AKS $ANR $SD $FNMA
Thomas Collins
15 Sep 14 15:01:20
$AKS Bank Of America Lowers 2015E EPS On AK Steel Holding Corporation http://t.co/3CvhxogrAx
Daily Contracts
15 Sep 14 12:28:02
Real-Time feed of company contracts, original agreements and executive updates from AK Steel Holding Corporation $AKS http://t.co/TxgZOD5uJc
US_proptrader
15 Sep 14 12:21:38
$AKS $AVNR $COSI $CPLP $FUEL $OREX $PGNX $RWLK $VIMC autocharts @ http://t.co/hj7PGeTQk3
Kym L
15 Sep 14 12:21:25
$AKS seems to be looking to base
Adolfo DIz
15 Sep 14 12:15:39
RT @SeekingAlpha: Why A.K. Steel's Pullback Is A Buying Opportunity http://t.co/aohC5IUyHd $AKS
Seeking Alpha
15 Sep 14 12:13:53
Why A.K. Steel's Pullback Is A Buying Opportunity http://t.co/aohC5IUyHd $AKS
TipRanks
15 Sep 14 11:20:52
1-star analyst Timna Tanners from Merrill Lynch reiterated a BUY rating on $AKS. Timna has a -1.6% average return http://t.co/bJp0d3Erbs
US_proptrader
15 Sep 14 10:32:28
$AKS $CGA $PVA $RWLK autocharts @ http://t.co/hj7PGeTQk3
US_proptrader
15 Sep 14 09:52:36
$AKS $ALJ $AVNR $AXAS $FOLD $PVA $RWLK $TPLM autocharts @ http://t.co/hj7PGeTQk3
				
				
By  +Follow September 20, 2013 7:55AM
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