AK Steel Loses $78.2M in Second Quarter
MIDDLETOWN, Ohio (AP) _ AK Steel Corp. said on Friday that it lost $78.2 million in the second quarter as lower steel prices and higher costs for raw materials and maintenance hurt profits. The loss was larger than Wall Street expected and its shares tumbled.
The company lost 72 cents per share for the quarter that ended June 30, compared with a profit of $16.2 million, or 15 cents a share, last year.
Analysts surveyed by Thomson First Call had predicted a loss of 43 cents a share.
AK Steel had sales of $1.02 billion on shipments of 1.4 million tons, compared with sales of $1.14 billion on shipments of 1.5 million tons a year ago. The 7 percent reduction in tonnage shipped was partly a result of the company’s decision to reduce shipments to spot markets where prices are depressed.
The company’s average price for flat-rolled steel declined by 4 percent to $682 per ton from the same period last year.
On the New York Stock Exchange, AK Steel shares were down 49 cents to close at $2.64.
For the first six months of this year, AK Steel lost $119 million, or $1.10 per share, compared with a loss of $9.4 million, or 9 cents a share, in 2002. Sales totalled $2 billion on 2.77 million tons shipped, compared with $2.1 billion and 2.9 million tons last year.
AK Steel said a planned maintenance outage on its Middletown Works blast furnace during the quarter cost $11.4 million. The company said it had higher costs for purchased slabs, carbon and stainless scrap, nickel and natural gas.
The company shut down a sinter ore recycling plant in Middletown, resulting in a write-off of $4.1 million, in favor of using a cheaper fluxed iron ore pellet in the Middletown blast furnace.
At the Ashland, Ky., mill, AK Steel spent $2.4 million preparing to resume coke production at a battery idled since 2001. Management said the restart, planned later this month, will result in lower annual coke costs of about $3 million.
The Middletown-based company sells to customers in the auto, appliance, construction and manufacturing markets. It has steelmaking and finishing plants in Middletown, Coshocton, Mansfield, Walbridge and Zanesville in Ohio; Ashland, Ky.; Rockport, Ind.; and Butler, Pa.
It also operates an industrial park on the Houston ship channel in Texas and owns Douglas Dynamics, which makes snowplows and salt spreaders for medium-size trucks.
On the Net:
AK Steel: http://www.aksteel.com