AKS AK Steel Holding Corp

AK Steel Holding Corporation (AKS) announced that it has signed a new three-year labor contract with the members of the United Auto Workers (UAW) Local 4104. The new agreement covers 185 hourly production and maintenance employees at the company's Zanesville Works in Ohio. 

The new agreement is expected to commence from May 20, 2012 before the expiry of the old agreement. The new agreement, which is scheduled to expire on May 20, 2015, will provide a competitive and flexible environment for the employees of AK Steel at Zanesville.

In January 2012, AK Steel posted its fourth-quarter 2011 results, delivering a net loss of $193.9 million or $1.76 per share compared with a net loss of $98.3 million or 89 cents per share during the year-ago quarter.

The results included a non-cash pre-tax pension corridor charge of $268.1 million, or $1.50 per share. Excluding this amount, the company's adjusted net loss for the quarter was $28.0 million, or 26 cents per share, beating the Zacks Consensus Estimate of a loss of 39 cents per share.

For 2011, AK Steel reported a net loss of $155.6 million, or $1.41 per share compared with a net loss of $128.9 million, or $1.17 per share in 2010. Excluding the non-cash pre-tax pension corridor charge of $268.1 million, or $1.50 per share, the company's adjusted net income for 2011 was $10.3 million, or 9 cents per share.

Net sales were $1,509.2 million on the shipments of 1,409,900 tons versus $1,390.6 million on shipments of 1,359,900 tons in the prior-year quarter. It was ahead of the Zacks Estimate of $1,481 million.

Average selling price for the quarter was $1,070, up 5% year over year, but down 8% sequentially. For 2011, sales were $6,468.0 million, up 8% year over year. Shipments were 5,698,800 tons versus 5,660,900 tons in 2010.

Due to continued uncertainty and volatility with respect to economic conditions in the U.S. and other markets, AK Steel did not provide any outlook for the company's first quarter 2012 results. 

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. The company 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. Further, 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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