Steel maker AK Steel Holding Corporation ( AKS ) posted a net loss of $17.1 million or 13 cents per share in second-quarter 2014 compared with a loss of $40.4 million or 30 cents per share in the year-ago quarter. Losses narrowed year over year as the company saw higher sales in the quarter on increased shipments.
Excluding unrealized loss on commodity derivatives, the company's earnings were 2 cents per share, which compared favorably with the Zacks Consensus Estimate of a loss of 4 cents per share.
AK Steel's shares rose as much as around 7.8% in the trading session to hit a new 52-week high of $9.45 following the earnings release, reflecting the forecast-topping results.
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Revenues, Pricing and Shipments
Revenues rose roughly 9% year over year to $1,530.8 million in the reported quarter, topping the Zacks Consensus Estimate of $1,501 million.
Shipments increased by around 5.6% year over year to 1,397,500 tons due to recovery from planned and unplanned outages at the Ashland Works blast furnace in the second quarter, partly offset by adverse weather conditions that decreased the availability of iron ore pellets.
Average selling price increased 3.2% year over year to $1,095 per ton due to better shipment mix of value-added products and higher spot market price of carbon steel products.
Cost and Margins
Total operating costs increased around 7.4% year over year to $1,494.3 million in the second quarter. Operating income for the reported quarter was $36.5 million compared with $13.7 million recorded in the prior-year quarter.
AK Steel also incurred $2.5 million for planned outages during the reported quarter compared with $21.6 million in the year-ago quarter. The company in the reported quarter recorded a LIFO credit of $3.3 million compared with $12.4 million in the year-ago quarter.
Cash and cash equivalents, as of Jun 30, 2014, were down roughly 6% to $54.8 million compared to $58.4 million in the year ago quarter. Long-term debt, as of Jun 30, 2014, was $1,948.2 million.
AK Steel plans to announce detailed third-quarter 2014 guidance in Sep 2014.
AK Steel currently has a Zacks Rank #3 (Hold).
Better-ranked companies in the steel industry worth considering include Grupo Simec S.A.B. de C.V. ( SIM ), Olympic Steel Inc. ( ZEUS ) and ThyssenKrupp AG ( TYEKF ). While Grupo Simec retains a Zacks Rank #1 (Strong Buy), Olympic Steel and ThyssenKrupp carry a Zacks Rank #2 (Buy).
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