A month has gone by since the last earnings report for AK Steel Holding Corporation . Shares have added about 6.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
AK Steel's Q4 Earnings Top Estimates, Sales Lag
AK Steel topped earnings estimates in fourth-quarter 2016, helped by its cost-reduction actions. The company's adjusted earnings (barring one-time items) of $0.25 per share for the quarter zoomed past the Zacks Consensus Estimate of $0.07.
On a reported basis, the company logged a net loss of $62.4 million or $0.22 per share in the fourth quarter, narrower than a loss of $145.4 million or $0.82 per share in the year-ago quarter. The results in the reported quarter include one-time items including charges related to pension settlement and termination of pellet agreement with Magnetation LLC.
Total operating costs in the reported quarter fell around 9% year over year to roughly $1.4 billion.
The company recorded net sales of $1,418.6 million for the quarter, down roughly 8% from the year-ago quarter. Sales missed the Zacks Consensus Estimate of $1,434 million.
Pricing and Shipments
Shipments for the quarter were down around 15% year over year to 1,412,200 tons, affected by the company's move to reduce commodity steel sales to the distributor and converters market and slightly lower shipments to the automotive industry. Selling price per ton rose 7% year over year to $998 in the quarter on improved sales mix and increased carbon steel spot market pricing.
Full-year Results
AK Steel logged a net loss of $7.8 million or $0.03 per share for 2016, lower than a net loss of $509 million or $2.86 per share in 2015. Adjusted earnings came in at $0.56 per share for the year.
Sales went down roughly 12% year over year to $5.88 billion for the full year on lower shipments.
Financials
AK Steel exited 2016 with cash and cash equivalents of $173.2 million, a roughly three-fold year over year rise. Long-term debt fell roughly 23% year over year to around $1.8 billion. Cash flows from operating activities were $304.6 million in 2016.
Outlook
Moving ahead, AK Steel expects shipments for first-quarter 2017 to be modestly higher on a sequential comparison basis as a seasonal pick-up in automotive shipments is expected to be partly offset by lower shipments to the electrical steel market.
The company also sees its average selling price to be flat in the first quarter compared with the fourth quarter. It expects a modest increase in selling prices on a year over year basis.
AK Steel also expects planned maintenance average costs of round $8 million in the first quarter, compared with $3 million a year ago. For full-year 2017, it sees outage costs to be roughly $90 million versus around $62 million in 2016.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two revisions lower for the current quarter. In the past month, the consensus estimate has shifted 19.07% downward due to these changes.
VGM Scores
At this time, AK Steel's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
Image: Bigstock
AK Steel (AKS) Up 6.4% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for AK Steel Holding Corporation . Shares have added about 6.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
AK Steel's Q4 Earnings Top Estimates, Sales Lag
AK Steel topped earnings estimates in fourth-quarter 2016, helped by its cost-reduction actions. The company's adjusted earnings (barring one-time items) of $0.25 per share for the quarter zoomed past the Zacks Consensus Estimate of $0.07.
On a reported basis, the company logged a net loss of $62.4 million or $0.22 per share in the fourth quarter, narrower than a loss of $145.4 million or $0.82 per share in the year-ago quarter. The results in the reported quarter include one-time items including charges related to pension settlement and termination of pellet agreement with Magnetation LLC.
Total operating costs in the reported quarter fell around 9% year over year to roughly $1.4 billion.
The company recorded net sales of $1,418.6 million for the quarter, down roughly 8% from the year-ago quarter. Sales missed the Zacks Consensus Estimate of $1,434 million.
Pricing and Shipments
Shipments for the quarter were down around 15% year over year to 1,412,200 tons, affected by the company's move to reduce commodity steel sales to the distributor and converters market and slightly lower shipments to the automotive industry. Selling price per ton rose 7% year over year to $998 in the quarter on improved sales mix and increased carbon steel spot market pricing.
Full-year Results
AK Steel logged a net loss of $7.8 million or $0.03 per share for 2016, lower than a net loss of $509 million or $2.86 per share in 2015. Adjusted earnings came in at $0.56 per share for the year.
Sales went down roughly 12% year over year to $5.88 billion for the full year on lower shipments.
Financials
AK Steel exited 2016 with cash and cash equivalents of $173.2 million, a roughly three-fold year over year rise. Long-term debt fell roughly 23% year over year to around $1.8 billion. Cash flows from operating activities were $304.6 million in 2016.
Outlook
Moving ahead, AK Steel expects shipments for first-quarter 2017 to be modestly higher on a sequential comparison basis as a seasonal pick-up in automotive shipments is expected to be partly offset by lower shipments to the electrical steel market.
The company also sees its average selling price to be flat in the first quarter compared with the fourth quarter. It expects a modest increase in selling prices on a year over year basis.
AK Steel also expects planned maintenance average costs of round $8 million in the first quarter, compared with $3 million a year ago. For full-year 2017, it sees outage costs to be roughly $90 million versus around $62 million in 2016.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two revisions lower for the current quarter. In the past month, the consensus estimate has shifted 19.07% downward due to these changes.
AK Steel Holding Corporation Price and Consensus
AK Steel Holding Corporation Price and Consensus | AK Steel Holding Corporation Quote
VGM Scores
At this time, AK Steel's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.