NEW YORK AK Steel Corp.
said it expects to report a fourth-quarter loss of between 67
and 72 cents per diluted share due to a decline in average
selling prices and expected tax expenses.
While the West Chester,
Ohio-based steelmaker is forecasting higher shipment volumes in
the fourth quarterbetween 1.375 million and 1.4 million
tons vs. about 1.36 million tons in the third quarterit
also expects to see a 5-percent decline in average selling
AK Steel cited two main reasons
for the falling spot prices: a decline in the global economy
and lower raw material surcharges.
But while raw material costs
have started to pull back, those lower input
costsparticularly for iron orehave not yet fully
trickled through to the companys margins, AK Steel
The steel producer said it does
not expect to see the benefits of recent price increases on
carbon flat-rolled products until the first quarter of 2013 as
a "significant" portion of fourth-quarter shipments were booked
prior to the increases. Last week, AK Steel led a round of
increases on flat-rolled steel prices (
amm.com, Nov. 6), announcing a $50-per-ton hike on
top of a $40-per-ton increase announced in mid-October (
amm.com, Oct. 17). AK Steel also has announced
price increases on stainless products (
amm.com, Nov. 12).
In addition to pricing and
demand challenges, the steelmaker said a non-cash income tax
charge will account for 33 cents of the expected loss in the
In separate statements Tuesday,
AK Steel also said it is looking to generate capital through
common stock and debt offerings to repay borrowings under its
asset-backed credit facility and for general corporate
expenses. The company is offering 25 million shares of common
stock, $350 million in senior secured notes due 2018 and
another $125 million in exchangeable senior notes due 2019.