WEST CHESTER, Ohio,
Sept. 19, 2013 /PRNewswire/ -- AK Steel (NYSE: AKS) today
provided guidance for its third quarter of 2013 financial
results. AK Steel said it expects to incur a net loss of
$0.22 to $0.27 per diluted share of common stock, which
includes a loss of approximately $0.09 per diluted share related to the previously
disclosed unplanned Middletown Works
blast furnace outage described below. The principal
assumptions and other factors driving this estimate are set forth
below.
Shipments
AK Steel expects shipments of approximately
1,240,000 to 1,260,000 tons in the third quarter of 2013 compared
to shipments of 1,323,700 tons in the second quarter of 2013, a
decrease of approximately 5% to 6%. The reduction in
shipments from the second quarter is attributable principally to
the effects of the unplanned outage at the company's Middletown Works blast furnace and to a seasonal
reduction in shipments to the automotive market. As a result
of the outage, the company's melt production during the quarter has
been reduced, resulting in a delay of shipments to some carbon spot
market customers and an overall reduction in shipments during the
quarter.
Pricing
The company expects its average selling price
for the third quarter of 2013 to increase slightly to about
$1,065 per ton from its average
selling price of $1,061 per ton for
the second quarter of 2013. The expected increase in average
selling price is primarily due to a more favorable mix of
value-added products compared to the previous quarter, largely
offset by lower raw material surcharges and the effect of the
delayed shipments to customers resulting from the unplanned blast
furnace outage. The company has continued to honor its
commitments to customers for lower-priced orders placed prior to
the outage for carbon spot market shipments and, as a result of the
limitations on its capacity for shipments caused by the outage, the
company has not been able to realize the full benefit of price
increases in the carbon spot market which occurred during the third
quarter.
Planned Maintenance
Total planned maintenance outage
costs are expected to be about $5
million in the third quarter compared to $21.6 million in the second quarter, representing
a decrease of approximately $17
million in costs from the prior quarter.
Unplanned Blast Furnace Outage Effect and Insurance
Recovery
The company's projected loss for the third quarter
includes approximately $12 million,
or $0.09 per diluted share, related
to the unplanned blast furnace outage after an expected partial
insurance recovery. As previously disclosed, the company's
losses attributable to the unplanned blast furnace outage are
partially covered by property damage and business interruption
insurance. The company expects to recognize approximately
$14 million in insurance recoveries
during the third quarter related to the unplanned blast furnace
outage. The company anticipates there will be some additional
losses incurred and insurance recoveries recorded in the fourth
quarter.
Income Taxes
AK Steel said that it expects to record a
non-cash income tax expense of approximately $7 million, or $0.05 per diluted share of common stock, for the
third quarter of 2013 using the discrete tax method. In the
second quarter of 2013, the company recorded a tax provision of
$9.7 million, or $0.07 per diluted share. The company's
income tax provision is primarily related to changes in the
company's LIFO reserve, which results in a tax valuation allowance
adjustment related to the company's deferred tax assets, and could
affect this estimate.
Forward-Looking Statements
Some of the statements in
this release are intended to be, and hereby are identified as
"forward-looking statements" for purposes of the safe harbor
provisions of the Private Securities Litigation Reform Act of
1995. The company cautions readers that such forward-looking
statements involve risks and uncertainties that could cause actual
results to differ materially from those currently expected by
management, including the projected loss related to the unplanned
blast furnace outage and the amount of its related insurance
recoveries, as well as those risks and uncertainties discussed in
AK Holding's Annual Report on Form 10-K for the year ended
December 31, 2012, its subsequently
filed Quarterly Reports on Form 10-Q and Current Reports on Form
8-K filed with or furnished to the Securities and Exchange
Commission. Except as required by law, the company disclaims
any obligation to update any forward-looking statements to reflect
future developments or events.
AK Steel
AK Steel produces flat-rolled carbon,
stainless and electrical steels, primarily for automotive,
infrastructure and manufacturing, construction and electrical power
generation and distribution markets. The company employs
about 6,100 men and women in Middletown, Mansfield, Coshocton and Zanesville, Ohio; Butler, Pennsylvania; Ashland, Kentucky; Rockport, Indiana; and its corporate
headquarters in West Chester,
Ohio.
AK Tube LLC, a wholly-owned subsidiary of AK Steel, employs
about 300 men and women in plants in Walbridge, Ohio and Columbus, Indiana.
AK Tube produces carbon and stainless electric resistance welded
(ERW) tubular steel products for truck, automotive and other
markets.
AK Coal Resources, Inc., another wholly-owned subsidiary of AK
Steel, controls and is developing metallurgical coal reserves in
Somerset County,
Pennsylvania. AK Steel also owns 49.9% of Magnetation LLC, a
joint venture headquartered in Grand
Rapids, Minnesota, which produces iron ore concentrate from
previously mined ore reserves.
SOURCE AK Steel