NEW YORK AK Steel Corp. expects to post a bigger second-quarter net loss due to a planned blast furnace outage at one of its facilities, lower selling prices for carbon flat-rolled products and several tax expenses. However, the company expects pricing to improve in coming months.
The steelmaker anticipates a net loss of 33 to 38 cents per diluted share for the three months ending June 30, according to a guidance released June 17, compared with a first-quarter net loss of 7 cents per share, or $9.9 million (amm.com, April 23). If results come in as expected, it would be the companys eighth consecutive quarterly loss.
AK Steel said that its second-quarter results will include charges related to a planned seven-day maintenance outage at its blast furnace in Middletown, Ohio, the first major maintenance outage for that furnace since a reline in 2009.
Maintenance costs, including those for the Middletown blast furnace, are expected to reach $21 million in the second quarter vs. $1 million in the first three months of the year. The company said it does not have any other planned blast furnace maintenance outages for the remainder of 2013.
AK Steel forecast that second-quarter shipments would total between 1.34 million and 1.36 million tons, up 4 to 5 percent from 1.29 million tons in the first quarter due to increased shipments to the automotive and carbon spot markets.
The West Chester, Ohio-based steelmaker noted that its average selling prices have fallen 1 percent to $1,055 per ton, but it expects prices to improve in the near term. "The expected decrease in average selling price is primarily due to lower spot market prices for carbon steel products compared to the previous quarter," it said. "Despite this quarter-over-quarter reduction, pricing has been more favorable in recent weeks. ... As a result, the companys spot market selling prices have improved recently and the company expects to continue to benefit in future months from these announced price increases."
AK Steels second-quarter results are expected to include a tax expense of some $14 million, as well as a $15-million income tax expense related to the companys last-in first-out reserve.