AKS AK Steel Holding Corp

Effective immediately, AK Steel Holding Corporation (AKS) will increase the current spot market base prices by $50 per ton for all carbon flat-rolled steel products. 

Recently, AK Steel posted its third-quarter 2011 results, delivering net loss of $3.5 million or $0.03 cents compared with net loss of $59.2 million or $0.54 cents during the year-ago quarter. However, results were below the Zacks Consensus Estimate of $0.00 cents per share.

Third-quarter 2011 results include after-tax expenses of approximately $6.2 million, or $0.05 per diluted share, for costs related to the previously reported incident involving an electric steelmaking furnace at the Butler Works, which was damaged on July 1, 2011.

Net sales, as reported by the company, were $1,585.8 million on the shipments of 1,368,800 tons versus $1,575.9 million and 1,465,800 tons in the prior-year quarter. Net sales also missed the Zacks Consensus Estimate of $1,662 million. Average selling price for the third quarter of 2011 was $1,158 per ton, up 8% year over year, but down 2% sequentially.

Cash and cash equivalents reduced to $58.7 million as of September 30, 2011 versus $216.8 million as of December 31, 2010. Long-term debt of the company decreased marginally to $650.2 million as of September 30, 2011 versus $650.6 million as of December 31, 2010.

The debt-to-capitalization ratio stood at 50.8% as of September 2011 versus 50.2% as of June 30, 2010 and 50.2% as of December 31, 2010.

As of September 30, 2011, cash from operating activities was $355.4 million compared with $176.5 million as of September 30, 2010.

Due to continued uncertainty and volatility with respect to economic conditions in the U.S. and in other markets served by the company, AK Steel is not currently providing any outlook for the company’s fourth-quarter results.  However, the company stated that it intends to provide fourth-quarter guidance later during the quarter.

AK Steel is uniquely positioned to focus on products with high margins. Electrical steel continues to be the company’s strongest product line, with demand recovering in the U.S. and abroad, though at a slower rate. AK Steel is operating its plants at above 80% capacity and is well positioned to serve the end markets when the demand rebounds.

However, higher input costs, particularly iron ore, is eroding margins of the company. Iron ore pricing concerns have led to a negative outlook for steel manufacturers. A K Steel currently retains a Zacks #3 Rank (short-term Hold rating).

The company competes with Nucor Corporation (NUE), U.S. Steel Corp. (X) and Steel Dynamics Inc. (STLD).

 
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