AK Steel Holding Corporation (AKS) will be adding a $390 per ton surcharge to invoices for electrical steel products shipped in May 2011. The surcharges are based on reported prices of raw materials and energy used to manufacture the products, with the March 2011 purchase cost used to determine the May 2011 surcharges.
Earlier in January, AK Steel reported its fourth-quarter results incurring an adjusted after-tax loss of $54.5 million or 49 cents per share, outperforming the Zacks Consensus Estimate loss of 62 cents per share.
Fourth-quarter results excluded one-time items of $63.7 million pre-tax charge related to the earlier announced AK Steel Holding Corporation and $9.1 million pre-tax charge pertaining to a retiree benefit settlement associated with the company’s Butler Works.
Including these special items, the company reported a loss of $98.3 million or 89 cents per share compared with a net income of $39.8 million or 36 cents per share in the prior-year quarter.
AK Steel expects an increase of 7% quarter over quarter in the first quarter of fiscal 2011 leading to 1,450,000 tons and approximately 8% quarter-over-quarter rise in its average per-ton selling price compared with the fourth-quarter price level. The expected increase is attributable to the anticipated higher contract and spot market prices and better product mix.
For iron ore, scrap and coal, the company expects higher price of raw material to be likely offset by an improved operating performance. At the operating level, the company expects to break even for the first quarter of fiscal 2011.
Ohio-based AK Steel Holding Corporation is a leading producer of flat-rolled carbon, stainless, electrical steel and tubular products. It operates 7 steel-making and finishing plants in Ohio, Pennsylvania, Indiana and Kentucky. The company competes with Nucor Corporation (NUE) and Steel Dynamics Inc. (STLD).
Currently, AK Steel has a short-term (1 to 3 months) Zacks #1 Rank (Strong Buy) and a long-term (6+ months) Neutral recommendation.
AK STEEL HLDG (AKS): Free Stock Analysis Report
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STEEL DYNAMICS (STLD): Free Stock Analysis Report
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