AK Steel Holding Corporation reported net income of $28.7 million or 9 cents per share in the first quarter of 2018, down 66% from the net income of $84.4 million or 26 cents recorded in the prior-year quarter. Earnings, however, surpassed the Zacks Consensus Estimate of 3 cents.

 

Total operating costs in the quarter rose around 13.6% year over year to roughly $1,595.3 million.

 

Net sales of $1,658.9 million for the first quarter rose 8.2% year over year, which also topped the Zacks Consensus Estimate of $1,549 million.

 

 

 

 

Flat-rolled steel shipments for the first quarter were down around 1.7% year over year to 1,430,900 tons. Average selling price per ton for flat-rolled steel rose 4% year over year to $1,045.

 

 

AK Steel exited first-quarter 2018 with cash and cash equivalents of $44.5 million compared with 185.7 million in prior-year quarter. The company had $819.8 million available under its revolving credit facility at the end of the first quarter.

 

The company’s long-term debt rose roughly 24.9% year over year to $2,103.3 million.

 

Cash flows from operating activities were $65.6 million for the reported quarter compared with $36.3 million a year ago.

 

 

The company expects market conditions to strengthen in the second quarter on a sequential comparison basis. For second-quarter 2018, AK Steel expects flat-rolled shipments to be roughly 5% to 7% higher than the first quarter. It anticipates average selling price per flat-rolled ton to be about $1,075 in the second quarter. The company sees improvement in pricing and volumes, as a result of which, adjusted EBITDA margin is expected to improve by 1.5 to 2 percentage points sequentially in the second quarter of 2018.

 

 

Shares of AK Steel have moved up 2.4% in the last six months, underperforming the industry’s 16.3% growth.

 

 

 

 

 

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

 

Some better-ranked stocks in the basic materials space are Kronos Worldwide Inc. (KRO Quick QuoteKRO - Free Report) , Westlake Chemical Corporation (WLK Quick QuoteWLK - Free Report) and Steel Dynamics Inc. (STLD Quick QuoteSTLD - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

 

Kronos has an expected long-term earnings growth rate of 5%. Its shares have gained 33.4% over a year.

 

Westlake Chemical has an expected long-term earnings growth rate of 12.18%. Its shares have gained 70.15% over a year.

 

Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have moved up 23.65% over a year.

 

 

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