AK Steel reported a net loss of $3.5 million on net sales of $1,585.8 million for the third quarter and net income of $38.3 million on net sales of $4859.8 million for the first nine months of 2011.
Third Quarter Results — The $3.5 million net loss ($0.03 per diluted share of common stock) compares to a net loss of $59.2 million ($0.54 per diluted share) for the year-ago third quarter. Results include approximately $6.2 million (about $0.05 per diluted share) of after-tax expenses for costs related to the previously reported incident involving damage to electric steelmaking furnace at the Butler Works on July 1, 2011.
Net sales of $1,585.8 million compare to sales of $1,575.9 million in the year-ago third quarter, and shipments of 1,368,800 tons compare to shipments of 1,465,800 tons in the year-ago third quarter. The company said its average selling price for the third quarter was $1,158 per ton, a 2% decrease from the previous quarter, but about 8% higher than for the year-ago third quarter.
The company reported a third-quarter operating profit of $11.4 million ($8 per ton), which includes a $9.5 million LIFO credit and pre-tax expenses of $9.8 million to the EAF incident at Butler Works. Excluding the Butler Works furnace incident costs, the company's adjusted third quarter operating profit was $21.2 million ($15 per ton).
"Despite the challenges of a sputtering economy and extraordinarily high raw material costs, AK Steel reported operating income for the quarter," said James L. Wainscott, Chairman, President and CEO of AK Steel. "While challenging global economic conditions have created strong headwinds for our company and our country, AK Steel employees have again demonstrated their mettle with unwavering focus on our core values of safety, quality and productivity."
Nine-Month Results — The company’s $38.3 million net income ($0.35 per diluted share) for the first nine months compares to a net loss of $30.6 million ($0.28 per diluted share) for the corresponding 2010 period. Results include approximately $6.2 million in after-tax expenses (about $0.05 per diluted share) for the furnace incident at Butler Works, and a $2.0 million charge ($0.02 per diluted share) related to state tax law changes. YTD 2010 results included a $25.3 million non-cash charge ($0.23 per diluted share) related to federal healthcare legislation.
Shipments of 4,288,900 tons compare to shipments of 4,301,000 tons in the first nine months of 2010. Sales of $4,958.8 million compare to sales of $4,577.7 million in the first nine months of 2010.
The company reported an operating profit of $99.4 million ($23 per ton) for the first nine months, which compares to an operating profit of $20.7 million ($5 per ton) for the first nine months of 2010. The year-over-year increase in sales revenue was largely offset by increases in raw material costs, particularly for iron ore and metallurgical coal.
Fourth Quarter 2011 Outlook — AK Steel is not providing an outlook for the company's fourth quarter results at this time due to continued uncertainty and volatility with respect to economic conditions in the U.S. and other markets served by the company. However, the company said that it intends to provide fourth quarter guidance later during the quarter.
AK Steel produces flat-rolled carbon, stainless and electrical steels, primarily for automotive, infrastructure and manufacturing, construction and electrical power generation and distribution markets. The company employs about 6200 men and women in Middletown, Mansfield, Coshocton and Zanesville, Ohio; Butler, Pa; Ashland, Ky.; Rockport, Ind.; and its corporate headquarters in West Chester, Ohio.
AK Tube LLC, a wholly-owned subsidiary of AK Steel, employs about 300 men and women in plants in Walbridge, Ohio and Columbus, Ind. AK Tube produces carbon and stainless electric resistance welded (ERW) tubular steel products for truck, automotive and other markets.