AK Steel reported Tuesday a net loss of $86.1 million, or $0.63 per diluted share of common stock, for the first quarter of 2014, compared to a net loss of $9.9 million, or $0.07 per diluted share, for the first quarter of 2013 and net income of $35.2 million, or $0.26 per diluted share, for the fourth quarter of 2013.
The first quarter 2014 results were negatively affected by both a planned and an unplanned blast furnace outage, higher energy costs as a result of the extreme weather conditions and a legal settlement.
Net sales for the first quarter of 2014 were $1.38 billion on shipments of 1,262,100 tons, compared to net sales of $1.37 billion on shipments of 1,289,800 tons for the year-ago first quarter and net sales of $1.46 billion on shipments of 1,420,000 tons for the fourth quarter of 2013. The reduction in shipments in the first quarter of 2014 compared to the fourth quarter of 2013 was primarily due to the effects of the previously disclosed unplanned outage at the company’s Ashland Works blast furnace discussed below. The overall reduction reflects a decline in shipments of electrical steel and of carbon steel to the spot market, partially offset by higher automotive shipments.
The company also incurred higher costs for iron ore and carbon scrap during the first quarter of 2014 compared to the fourth quarter of 2013. In addition, during the first quarter of 2014, the company incurred a charge of $5.8 million relating to a tentative settlement of certain class action antitrust claims. The settlement remains subject to court approval. The company believes that the claims asserted against it lack merit, but it elected to enter into a settlement in order to avoid the ongoing expense of defending itself in protracted and expensive antitrust litigation.
“Our first quarter results were negatively impacted by extreme cold weather in the U.S., as well as planned and unplanned outages at our Ashland Works,” said James L. Wainscott, Chairman, President and CEO of AK Steel. “Having worked through those challenges, we believe that AK Steel is well-positioned for a much improved second quarter.”
