Trade Resources Industry Views AK Steel Provided Guidance for Its Fourth Quarter 2014 Financial Results

AK Steel Provided Guidance for Its Fourth Quarter 2014 Financial Results

AK Steel provided guidance for its fourth quarter 2014 financial results, indicating that, despite incurring approximately $31 million in costs associated with a planned Ashland Works blast furnace outage, the company expects to report higher EBITDA (earnings before interest, taxes, depreciation and amortization) compared to the third quarter of 2014 and net income of $0.05 to $0.10 per diluted share of common stock, excluding the effects of acquisition-related expenses pertaining to its recent purchase of Severstal Dearborn.

For the fourth quarter of 2014, the company expects shipments of approximately 2,000,000 tons, an increase of about 37 percent from the 1,462,900 tons shipped in the third quarter of 2014. The anticipated higher level of shipments in the fourth quarter is mostly due to the acquisition of Dearborn Works and continued strong demand from the automotive market.

The company expects its average selling price for the fourth quarter of 2014 to be approximately $980 per ton, about 10 percent less than the third quarter of 2014 average selling price of $1,089 per ton. The anticipated decrease in the company’s overall average selling price is primarily due to a higher percentage of product shipments to the carbon spot market in the fourth quarter compared to the third quarter, principally due to the higher mix of hot-rolled coil shipments from Dearborn Works, as well as a general reduction in spot market pricing.

As previously disclosed, the company took a planned outage at its Ashland Works blast furnace beginning in October 2014. The planned outage, which included a reline of the blast furnace hearth, was originally scheduled for 28 days but was completed in 27 days. The outage included capital investments of approximately $19 million and approximately $31 million of costs associated with the planned outage itself and reduced production levels at Ashland Works in the period prior to the outage. The company took steps in advance of the outage to minimize the potential impact on its customers, including purchasing additional carbon slabs and building inventory through increased production at other AK Steel manufacturing locations.

The company believes that the reline of the blast furnace hearth will position it well to provide stable blast furnace operations in the future by allowing the company to avoid the unplanned disruptions that have occurred throughout 2014. In addition, the company expects this investment to reduce the company’s future production costs by returning the Ashland Works blast furnace to normal operating levels and allow the company to better serve its customers in the future.

Source: http://www.steelorbis.com/steel-news/latest-news/ak-steel-expects-higher-q4-income-despite-furnace-outage-859012.htm
Contribute Copyright Policy
AK Steel Expects Higher Q4 Income Despite Furnace Outage Monday, 22 December 2014
Topics: Metallurgy