A month has gone by since the last earnings report for AK Steel . Shares have lost about 21.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is AK Steel due for a breakout? 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 catalysts.
AK Steel Tops Q1 Earnings, Misses Sales Estimates
AK Steel slipped to a loss of $4.5 million or a penny per share in the first quarter of 2019, from a profit of $ $28.7 million or 9 cents in the prior-year quarter.
The bottom line in the reported quarter was hit by charges of $77.4 million related to Ashland Works facility closure.
Barring one-time items, adjusted earnings per share came in at 23 cents for the quarter. The figure topped the Zacks Consensus Estimate of 12 cents.
Net sales of $1,697.7 million in the quarter rose around 2% year over year, but missed the Zacks Consensus Estimate of $1,725.7 million. Increased selling prices for most products and higher shipments to the distributors and converters market were partly offset by reduced shipments to the automotive market.
Pricing and Shipments
Flat-rolled steel shipments in the quarter were down around 3% year over year to 1,388,400 tons. Average selling price per ton for flat-rolled steel rose 6% to $1,112.
Financials
AK Steel exited the quarter with cash and cash equivalents of $41.2 million, down 7% year over year. The company’s long-term debt declined around 3% year over year to $2,037.7 million.
Cash outflow from operating activities was $7.9 million for the quarter compared with cash flow of $65.6 million a year ago.
Guidance
AK Steel cut its profit forecast for 2019 factoring in the change in hot-rolled carbon spot market pricing. The company now sees net income to be in the range of $76-$96 million or 24-30 cents per share for the full year, down from its previous view of $160-$180 million or 51-57 cents per share.
Adjusted net income for 2019 is forecast to be in the range of $153-$173 million or 48-54 cents per share. Adjusted EBITDA is expected between $505 million and $525 million, down from the company’s earlier view of $515 million and $535 million.
AK Steel expects planned maintenance outage expenses for 2019 to be $70-$80 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -82.68% due to these changes.
VGM Scores
At this time, AK Steel has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, 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 aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, AK Steel has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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AK Steel (AKS) Down 21.1% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for AK Steel . Shares have lost about 21.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is AK Steel due for a breakout? 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 catalysts.
AK Steel Tops Q1 Earnings, Misses Sales Estimates
AK Steel slipped to a loss of $4.5 million or a penny per share in the first quarter of 2019, from a profit of $ $28.7 million or 9 cents in the prior-year quarter.
The bottom line in the reported quarter was hit by charges of $77.4 million related to Ashland Works facility closure.
Barring one-time items, adjusted earnings per share came in at 23 cents for the quarter. The figure topped the Zacks Consensus Estimate of 12 cents.
Net sales of $1,697.7 million in the quarter rose around 2% year over year, but missed the Zacks Consensus Estimate of $1,725.7 million. Increased selling prices for most products and higher shipments to the distributors and converters market were partly offset by reduced shipments to the automotive market.
Pricing and Shipments
Flat-rolled steel shipments in the quarter were down around 3% year over year to 1,388,400 tons. Average selling price per ton for flat-rolled steel rose 6% to $1,112.
Financials
AK Steel exited the quarter with cash and cash equivalents of $41.2 million, down 7% year over year. The company’s long-term debt declined around 3% year over year to $2,037.7 million.
Cash outflow from operating activities was $7.9 million for the quarter compared with cash flow of $65.6 million a year ago.
Guidance
AK Steel cut its profit forecast for 2019 factoring in the change in hot-rolled carbon spot market pricing. The company now sees net income to be in the range of $76-$96 million or 24-30 cents per share for the full year, down from its previous view of $160-$180 million or 51-57 cents per share.
Adjusted net income for 2019 is forecast to be in the range of $153-$173 million or 48-54 cents per share. Adjusted EBITDA is expected between $505 million and $525 million, down from the company’s earlier view of $515 million and $535 million.
AK Steel expects planned maintenance outage expenses for 2019 to be $70-$80 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -82.68% due to these changes.
VGM Scores
At this time, AK Steel has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, 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 aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, AK Steel has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.