Yesterday morning, AK Steel (AKS) reported weak results for the third quarter of 2009. Net income of $6.2 million, or $0.06 per diluted share of common stock was for the quarter, compared to net income of $188.3 million, or $1.67 per diluted share, for the third quarter of 2008.The third-quarter 2009 results represent a $53.4 million improvement over the second quarter of 2009, net loss of $47.2 million, or $0.43 per diluted share.
Net sales for the quarter were $1,041.1 million on shipments of 1,047,800 tons, compared to sales of $2,157.6 million on shipments of 1,476,300 tons for the year-ago quarter. The average selling price for the third quarter of 2009 was $994 per ton, a 7% decrease from the $1,072 per-ton price in the second quarter of 2009, and approximately 32% lower than the $1,462 per-ton average price realized in the third quarter of 2008.
The company reported third-quarter 2009 operating profit of $15.3 million versus $309.6 million in the year ago quarter. The most recent operating results represent an improvement of $87.8 million over $72.5 million in the previous quarter.
For the fourth quarter of 2009, the company expects maintenance costs to be approximately $10 million higher compared to the previous quarter. AK Steel expects lower operating and raw material costs in the fourth quarter compared to the third quarter, and the company expects to generate an operating profit ranging from $30 to $35 per ton.
In addition, the company expects to incur a non-cash charge of approximately $5.0 million, or $0.05 per share of common stock, primarily as a result of a decrease in the value of the company’s deferred tax assets as the result of state tax law changes. However, AK Steel expects shipments of approximately 1,300,000 tons in the fourth quarter of 2009, an increase of nearly 24% over third-quarter shipments, primarily in carbon steel products.
However, the company expects its fourth-quarter 2009 average per-ton selling price to decline approximately by 2% compared to the third quarter of 2009 level. The expected decline in the average selling price is due to an anticipated higher percentage of carbon steel shipments relative to stainless and electrical shipments in the fourth quarter as compared to the third quarter.
Although, we expect an improvement in the overall fourth-quarter results mainly as a result of increased demand for flat-rolled products in North America , driven primarily by automotive markets, in general we remain gloomy over short-term industry and economy outlook.
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