AK Steel Says Profit Will Fall Short of Expectations
AK Steel Holdingon Monday projected a profit for the current quarter below current Wall Street predictions.
The West Chester, Ohio-based steel maker said it expects to post second-quarter net income of between 4 cents and 6 cents per share, while analysts polled by FactSet expect earnings of 11 cents per share.
AK Steel said its prediction is based on expectations that its steel shipments will total about 1.4 million tons for the quarter, which would mark a slight increase from first-quarter levels, and that its average per-ton selling price would be about equal to first-quarter levels.
Steel makers have struggled this year as a result of global economic uncertainty and the continued slump in the construction industry. At the same time, U.S. companies have been forced to compete with an influx of cheaper imported steel products.
AK Steel said its profit prediction also takes into account the possibility that it will have to record a valuation allowance for its deferred tax assets. At the same time, the company said it expects to get a boost from higher operating rates and lower raw material costs compared with the first quarter of this year.
As a result of heightened uncertainty and volatility surrounding economic conditions in the U.S. and other markets, AK Steel said it couldn't provide a profit prediction for the rest of 2012.
The company also said Monday that it may be able to obtain iron ore pellets from its Magnetation LLC joint venture earlier than 2015, as it had previously predicted. And AK Steel said that it is optimistic that it is ahead of schedule to produce coal from its AK Coal Resources Inc. subsidiary, which is in the process of developing its mining operations.
AK Steel shares fell 13 cents, or 2.4 percent, to $5.19 in morning trading Monday. They are still up 13 percent from their 52-week low of $4.59 per share last Tuesday. Its shares are well below their high for the past year of $16.75 per share in July.