AK Steel Holding Corporation reported net income of $67.2 million or 21 cents per share in the third quarter of 2018, up roughly three-fold from net income of $22.3 million or 7 cents in the prior-year quarter. Earnings per share, however, missed the Zacks Consensus Estimate of 23 cents.
Total operating costs in the quarter rose around 14% year over year to $1,620.8 million.
Net sales of $1,735.6 million in the third quarter rose around 16% year over year, but missed the Zacks Consensus Estimate of $1,821 million.
AK Steel Holding Corporation Price, Consensus and EPS Surprise
Pricing and Shipments
Flat-rolled steel shipments in the third quarter were up around 4% year over year to 1,424,000 tons. Average selling price per ton for flat-rolled steel rose 9.1% to $1,114.
Financials
AK Steel exited third-quarter 2018 with cash and cash equivalents of $47.3 million compared with $69.3 million in prior-year quarter. The company had $911.8 million available under its revolving credit facility at the end of the quarter under review.
The company’s long-term debt declined by 3% year over year to $2,034.9 million.
Cash flow from operating activities was $249.9 million in the first nine months of 2018 compared with $154 million a year ago.
Guidance
The company expects market conditions to remain strong in the fourth quarter. For the quarter, AK Steel expects flat-rolled shipments to be flat compared to the third quarter. It expects average selling price to decline 2-3%. The company also expects planned outage costs to be roughly $15 million in the fourth quarter compared with $4.7 million in the previous quarter. It expects adjusted EBITDA margin to decline by around 150 basis points sequentially in the fourth quarter. Meanwhile, the company expects year-over-year growth in adjusted EBITDA in the fourth quarter.
Price Performance
Shares of AK Steel have lost 11.2% in the past six months compared with the industry’s 20.4% decline.
Zacks Rank & Stocks to Consider
AK Steel currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the basic materials space are CF Industries Holdings, Inc. (CF - Free Report) , KMG Chemicals, Inc. and The Mosaic Company (MOS - Free Report) .
CF Industries has an expected long-term earnings growth rate of 6% and a Zacks Rank #1 (Strong Buy). The company’s shares have gained 20.9% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
KMG Chemicals has an expected long-term earnings growth rate of 28.5% and a Zacks Rank #2 (Buy). Its shares have risen 36.5% in a year’s time.
Mosaic has an expected long-term earnings growth rate of 7% and a Zacks Rank #2. The company’s shares have rallied 43.3% in the past year.
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AK Steel Holding Corporation reported net income of $67.2 million or 21 cents per share in the third quarter of 2018, up roughly three-fold from net income of $22.3 million or 7 cents in the prior-year quarter. Earnings per share, however, missed the Zacks Consensus Estimate of 23 cents.
Total operating costs in the quarter rose around 14% year over year to $1,620.8 million.
Net sales of $1,735.6 million in the third quarter rose around 16% year over year, but missed the Zacks Consensus Estimate of $1,821 million.
AK Steel Holding Corporation Price, Consensus and EPS Surprise
Pricing and Shipments
Flat-rolled steel shipments in the third quarter were up around 4% year over year to 1,424,000 tons. Average selling price per ton for flat-rolled steel rose 9.1% to $1,114.
Financials
AK Steel exited third-quarter 2018 with cash and cash equivalents of $47.3 million compared with $69.3 million in prior-year quarter. The company had $911.8 million available under its revolving credit facility at the end of the quarter under review.
The company’s long-term debt declined by 3% year over year to $2,034.9 million.
Cash flow from operating activities was $249.9 million in the first nine months of 2018 compared with $154 million a year ago.
Guidance
The company expects market conditions to remain strong in the fourth quarter. For the quarter, AK Steel expects flat-rolled shipments to be flat compared to the third quarter. It expects average selling price to decline 2-3%. The company also expects planned outage costs to be roughly $15 million in the fourth quarter compared with $4.7 million in the previous quarter. It expects adjusted EBITDA margin to decline by around 150 basis points sequentially in the fourth quarter. Meanwhile, the company expects year-over-year growth in adjusted EBITDA in the fourth quarter.
Price Performance
Shares of AK Steel have lost 11.2% in the past six months compared with the industry’s 20.4% decline.
Zacks Rank & Stocks to Consider
AK Steel currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the basic materials space are CF Industries Holdings, Inc. (CF - Free Report) , KMG Chemicals, Inc. and The Mosaic Company (MOS - Free Report) .
CF Industries has an expected long-term earnings growth rate of 6% and a Zacks Rank #1 (Strong Buy). The company’s shares have gained 20.9% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
KMG Chemicals has an expected long-term earnings growth rate of 28.5% and a Zacks Rank #2 (Buy). Its shares have risen 36.5% in a year’s time.
Mosaic has an expected long-term earnings growth rate of 7% and a Zacks Rank #2. The company’s shares have rallied 43.3% in the past year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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