Back to top

Analyst Blog

AK Steel Holding Corporation (AKS - Analyst Report) declared that it will raise the current spot market base prices for all carbon flat-rolled steel products by at least $50 per ton. The price hike is effective immediately with new orders.

Last month, AK Steel released its first-quarter 2013 results. The Ohio-based company posted a narrower loss in the quarter, aided by lower raw material costs.

AK Steel posted a net loss of $9.9 million (or 7 cents a share) in the quarter compared with a loss of $11.8 million (or 11 cents a share) a year-ago. The loss per share is narrower than the Zacks Consensus Estimate of a loss of 12 cents.

AK Steel saw a decline in raw material costs, mainly for iron ore, coal, carbon scrap and coke in the reported quarter. It had a lower LIFO credit of $6 million in the quarter compared with a LIFO credit of $12.4 million a year ago.

Revenues fell 9.2% year over year to $1,369.8 million in the reported quarter due to lower shipments to carbon spot market and missed the Zacks Consensus Estimate of $1,403 million.

Average selling price dropped 7% year over year to $1,062 per ton on account of lower spot market prices for carbon steel products, brought about by a decline in raw material surcharges and lower selling prices for electrical steel products globally. Shipments fell 2.7% year over year to 1,289,200 tons due to lower shipments to the carbon spot market.

AK Steel plans to release a detailed guidance for the second quarter in Jun 2013. The company has a planned maintenance outage at the Middletown Works blast furnace in the second quarter.

As a result, AK Steel expects to incur maintenance outage costs of roughly $21 million in the second quarter compared with $1 million in the first quarter of 2013, reflecting an increase to its costs. AK Steel anticipates that these enhanced maintenance costs in the second quarter would be mostly offset as a result of lower cost in other areas, primarily raw materials.

AK Steel is expected to benefit from the strength in the automotive market and higher shipment of carbon steel products to automakers. The company is also investing to internally procure about half of its iron ore and coal requirements. However, we are concerned about its high cost structure, the challenging operating backdrop in overseas markets, softness in the construction market and the weak steel pricing environment.

AK Steel currently maintains a Zacks Rank #3 (Hold).

Other companies in the steel industry worth considering are Usinas Sider , Angang Steel Company Ltd (ANGGY) and LB Foster Co. (FSTR - Analyst Report). All of them hold a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SUPER MICRO… SMCI 27.00 +10.25%
CANADIAN SO… CSIQ 38.34 +8.18%
BANCO DO BR… BDORY 16.78 +8.05%
CENTURY ALU… CENX 26.97 +7.97%
WILLDAN GRO… WLDN 11.38 +5.86%