Updated: 4:55 p.m. Thursday, Dec. 19, 2013 | Posted: 11:53 a.m. Thursday, Dec. 19, 2013

AK Steel shares rise 15% on expected higher earnings

By Chelsey Levingston

Staff Writer


AK Steel Holding Corp.’s stock price reached new highs in trading Thursday, the day after the steelmaker said it was anticipating a fourth quarter profit.

AK Steel said it expects to have net income of 2 cents to 6 cents per diluted share of common stock this quarter. Those estimates exclude the effects of any possible non-cash tax valuation benefits for retirement and inventories that could be recorded.

In the last July to September quarter, AK Steel had a net loss of $31.7 million or 23 cents per share. The company has not had a quarterly profit since the second quarter of 2011.

Fourth quarter and full-year 2013 results will be released Jan. 28.

The Butler County steelmaker’s stock price rose more than 15 percent to close Thursday at $7.29 per share. During the day, the local stock reached a new year-long high in trading of $7.52 per share.

AK Steel is Middletown’s largest employer. Between the company’s headquarters in West Chester Twp. and the Middletown steel plant, AK Steel carries approximately 2,400 full-time jobs in Butler County. It is the county’s third-largest employer behind Miami University and insurer Cincinnati Financial Corp.

Results are expected to improve on higher sales — AK Steel said it’s expecting to ship 13 percent more steel this quarter than it did last quarter.

AK Steel estimates are for shipments of approximately 1.4 million tons of steel for this October through December quarter, compared to shipments of 1.2 million tons last quarter.

“The company has seen stronger demand in the fourth quarter compared to the third quarter, particularly in carbon sales to the spot market. Additionally, the expected increase in shipments from the third quarter reflects the company’s recovery from the previously disclosed unplanned Middletown Works blast furnace outage,” reads the company’s guidance to investors.

The furnace, at AK Steel’s largest plant, had a mechanical failure in June and was shutdown. As reported with the company’s results for the third quarter, the furnace did not return to full production until October.

AK Steel officials also said production costs are lower this period, due to lower prices on iron ore pellets, a key raw material. However, AK Steel is seeing lower average selling prices quarter-to-quarter of 4 percent.

Company officials do not comment on its stock price.


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