AK Steel 3Q Earnings Slump 97% On Lower Demand, Prices
DOW JONES NEWSWIRES
AK Steel Holding Corp. (AKS) posted a 97% tumble in third-quarter profit as
shipments plunged 29% amid continuing weak demand.
Shares rose 1.7% premarket to $19.10 as results beat analysts' expectations.
The stock has more than doubled this year.
Chairman and Chief Executive James L. Wainscott said, "While the results may
pale in comparison to the year-ago records, in many respects the performance is
even more remarkable, given that" revenues fell 52%.
On top of a 41% jump in shipments from the second quarter--the company in July
projected at least a 25% increase--growth of 24% is seen sequentially in the
fourth quarter with average prices down 2%.
While results have been improving from earlier this year for the steel
industry, global sales are expected to remain mired below last year's peak at
least until 2011. The sector also is concerned about a carbon-emissions cap-and-
trade system included in the proposed U.S. climate bill.
Recent higher operating rates have been attributed to customers simply
replacing inventory rather than any real demand surge. Earlier Tuesday, United
States Steel Corp. (X) swung to a loss as weak demand crimped orders and
capacity use. Nucor Corp. (NUE) fell into the red last week.
AK Steel said profit fell to $6.2 million, or 6 cents a share, from $188.3, or
$1.67 a share, a year earlier. Net sales skidded 52% to $1.04 billion.
Analysts were expecting a 1-cent profit on revenue of $1.03 billion.
Gross margin slumped to 10.7% from 19.3% as average selling prices fell 32%.
The price decline from the second quarter was 7%.
-By Mike Barris and Kevin Kingsbury, Dow Jones Newswires; 212-416-2330;
mike.barris@dowjones.com;
(END) Dow Jones Newswires
10-27-090901ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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