Steel maker AK Steel (AKS - Free Report) again prevailed in the patent infringement litigation with ArcelorMittal (MT - Free Report) as the United States District Court for the District of Delaware has granted judgment in favor of the former. The summary judgment was declared on Oct 25, 2013, and it affirmed that AK Steel’s ULTRALUME advanced high-strength steel product does not infringe upon an ArcelorMittal patent.
Moreover, The Court confirmed that ArcelorMittal's patent was invalid as it deliberately violated a statutory prohibition by broadening a patent through reissuing it more than two years since the patent was granted initially.
AK Steel’s ULTRALUME steel helps automakers design lighter, more fuel-efficient vehicles without sacrificing occupant safety. It is used for hot-stamped, press-hardened applications where the ultimate tensile strength is less than 1,500 miles per annum (MPa). It has also been widely accepted by various automotive original equipment manufacturers (OEMs).
AK Steel posted narrower loss in third-quarter 2013, reported on Oct 22. The company recorded a net loss of $31.7 million or 23 cents a share in third-quarter, roughly 48% narrower than a loss of $60.9 million or 55 cents a share a year-ago. The results included charges related to the planned maintenance outage at its Middletown Works blast furnace in Ohio and unplanned blast furnace outage.
Barring one-time items (tax charges related to a valuation allowance for deferred tax assets), AK Steel’s loss for the quarter was 12 cents per share, narrower than the Zacks Consensus Estimate of a loss of 24 cents.
Revenues fell 9% year over year to $1,331.3 million in the reported quarter due to lower shipments. It missed the Zacks Consensus Estimate of $1,365 million. Shipments fell around 9% year over year to 1,242,400 tons due to the effects of unplanned outage and seasonal reduction in shipments in the automotive market.
AK Steel, which maintains property damage and business interruption insurance, expects the retained portion of its losses to be between $20 million and $23 million before taxes. While the remaining insurance recoveries are expected to be recognized in the fourth quarter, the extent and timing of the impact on the fourth quarter results will be decided depending on the agreement with the insurance underwriters on the insured portion of the losses.
AK Steel currently retains a Zacks Rank #3 (Hold).
Other companies in the steel industry with favorable Zacks Rank are Companhia Siderurgica Nacional (SID - Free Report) and Shiloh Industries Inc. (SHLO - Free Report) . Both carry a Zacks Rank #1 (Strong Buy).