AK Steel provided guidance for its fourth quarter of 2013 financial results Wednesday, saying it expects to realize net income of $0.02 to $0.06 per diluted share of common stock, excluding the effects of a potential non-cash income tax benefit related to pension and other postretirement benefit gains, as described below.
AK Steel expects shipments of approximately 1,400,000 tons in the fourth quarter of 2013 compared to shipments of 1,242,400 tons in the third quarter of 2013, an increase of approximately 13 percent. AK Steel said that 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.
Additionally, the company expects its average selling price for the fourth quarter of 2013 to decrease approximately 4 percent from its average selling price of $1,071 per ton for the third quarter of 2013. The expected decrease in average selling price from the third quarter is primarily due to a lower proportion of value-added shipments to the spot market in the fourth quarter.
Finally, the company said that it expects to incur lower production costs in the fourth quarter, primarily as a result of lower costs for iron ore pellets. Additionally, the company expects total planned maintenance outage costs to be about $2 million in the fourth quarter, compared to $4.2 million incurred in the third quarter. The company projects expense for the fourth quarter of approximately $5 million related to the Middletown Works unplanned blast furnace outage, net of insurance recoveries. 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 continues to work with its insurance underwriters on the claim.
