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AK Steel Reaches New Labor Agreement at Zanesville Works

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AK Steel Holding Corporation (AKS - Free Report) announced that the United Auto Workers (UAW) members have approved a new 3-year labor agreement. It is effective from May 31, 2019 through May 31, 2022.

Notably, Zanesville Works is a specialty flat-rolled finishing facility of the company’s stainless and electrical steels products. Per the company, the new labor agreement covers roughly 110 hourly production and maintenance at the OH-based facility. The deal continues to provide flexible and competitive labor contract for AK Steel and its Zanesville employees.

The company’s shares have lost 57.2% in the past year compared with the industry’s 40.8% decline.

AK Steel’s adjusted earnings per share came in at 23 cents in the first quarter, which surpassed the Zacks Consensus Estimate of 12 cents.

AK Steel, in April, cut its profit forecast for 2019, considering the change in hot-rolled carbon spot market pricing. It expects net income in the range of $76-$96 million or 24-30 cents per share for the full year, down from prior expectations of $160-$180 million or 51-57 cents.

Adjusted net income for 2019 is projected 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.

Zacks Rank & Key Picks

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

Some better-ranked stocks in the basic materials space are Materion Corporation (MTRN - Free Report) , Fortescue Metals Group Ltd. (FSUGY - Free Report) and AngloGold Ashanti Limited (AU - Free Report) , all currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Materion has an expected earnings growth rate of 27.3% for 2019. The company’s shares have gained 15.5% in the past year.

Fortescue Metals has an impressive projected earnings growth rate of 100% for the current year. The company’s shares have surged 56.6% in a year’s time.

AngloGold has an estimated earnings growth rate of 90.6% for the current year. Its shares have rallied 33.9% in the past year.

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