Automotive Strength To Aid AK Steel Q3 Results?

(RTTNews) - AK Steel Holding Corp. (AKS) is set to release its third-quarter numbers before the bell on Tuesday, October 27, with analysts estimating a loss of $0.08 per share on revenue of $1.70 billion. In the prior year period, the company reported a loss of $7.2 million or $0.05 per share and net sales of $1.59 billion. Adjusted net income was $16.4 million or $0.12 per share last year.

For the third quarter of 2015, the company expects to incur a loss of $0.02 - $0.07 per share, reflecting an improvement from the net loss of $0.36 per share in the second quarter of 2015.

AK Steel said it expects the positive financial effects of higher shipments, lower raw material costs, cost reduction efforts and higher operating rates to partly offset lingering low carbon steel spot market prices.

For the third quarter, AK Steel expects shipments of about 1,860,000 tons, an increase of about 3% from the sequential second quarter, driven by more shipments to the automotive market.

AK Steel expects an average selling price of about $910 per ton for the third quarter, about 2% lower than the prior quarter, due to lower carbon steel spot market pricing, which the company believes is driven by unfairly traded foreign steel imports.

Lower costs for raw materials - principally iron ore pellets and carbon scrap - and energy, along with the results of continued efforts across the company to reduce costs, partially offset the effects of lower steel selling prices.

In the last quarter, the company reported a net loss of $64.0 million or $0.36 per share, wider than the previous year's loss of $17.1 million or $0.13 per share.

On average, 17 analysts polled by Thomson Reuters expected the company to report loss of $0.37 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for second quarter of 2015 were $1.69 billion compared to $1.53 billion in the same period of last year. Analysts expected quarterly sales of $1.70 billion.

Shipments rose to 1,811,700 tons from 1,397,500 tons in the second quarter of 2014.

The company attributed the increase in sales and shipments largely to the addition of shipments from Dearborn Works, acquired in September of 2014, and continued strong shipments of carbon and stainless products to the automotive market.

Most recently, AK Steel issued a notice to hourly and salaried employees at its Ashland, Kentucky Works that it intends to temporarily idle the blast furnace and related steelmaking operations at the facility as a result of challenging domestic market conditions. AK Steel said it does not intend to idle the hot-dip galvanizing line at Ashland Works that primarily services automotive customers.