Shares of AK Steel Corporation (AKS) gained more than 6% after the company reported a net income of $39.8 million or 36 cents per share in the fourth quarter of 2009, in contrast to a net loss of $430.6 million or $3.87 per share for the fourth quarter of 2008. Reported earnings were ahead of the Zacks Consensus Estimate of 20 cents. For the full-year 2009, AK Steel reported a net loss of $74.6 million, or 68 cents per share, compared to a net income of $4.0 million, or 4 cents per share, for 2008.
Revenues for the quarter declined to $1.32 billion on shipments from $1.46 billion in the year-ago quarter, despite an increase in shipments to 1.37 tons in the reported quarter from 1.07 tons in the fourth quarter of 2008.
Higher shipments reflect an improvement in the year-over-year demand for steel. However, revenues and average selling prices were lower than in the fourth quarter of 2008 as the U.S. and global markets continue with a gradual recovery. Operating profit for the quarter was $87.0 million, or $64 per ton, compared to an operating loss of $689.2 million or $642 per ton for the fourth quarter of 2008.
Net sales for the year were $4.1 billion on shipments of 3.93 million tons, compared to sales of $7.64 billion on shipments of 5.87 million tons in 2008. Average selling price for 2009 was $1,036 per ton, about 20% below its 2008 average of $1,303 per ton.
The decline in shipments and revenues reflect the significant decline in the economy and the resultant decline in demand for steel products, especially in the first half of 2009. The company posted an operating loss for 2009 of $70.1 million, or $18 per ton, compared to operating profit of $28 million, or $5 per ton for 2008.
AK Steel ended 2009 with a cash balance of $461.7 million. Long-term debt totaled $605.8 million.
Outlook
AK Steel expects its first quarter 2010 shipments to approximate its fourth quarter 2009 levels, while average selling prices are expected to rise about 4% to 5% over the previous quarter levels. The company anticipates lower operating and maintenance costs compared to the fourth quarter of 2009.
AK Steel expects to report an operating profit of about $35 per ton for the first quarter of 2010, lower than $64 per ton reported in the fourth quarter of 2009. The company expects higher raw material cost to drive the expected decline in operating profit.
In a separate release, AK Steel also announced to make a $75 million pension trust fund contribution.
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