AK Steel sees quarterly loss; stock tumbles 7 percent
(Reuters) - AK Steel (AKS.N) on Friday forecast a third-quarter net loss significantly larger than what Wall Street estimated, partly due to lower prices, sending its shares lower as other U.S. steelmakers' stock rose on optimism over the global economy.
The Ohio-based steelmaker said it sees a net loss of between 60 cents and 65 cents per share - three times greater than Wall Street analysts' current expectation for a loss of 21 cents per share, according to Thomson Reuters I/B/E/S.
AK Steel shares fell 7.1 percent to $5.98 in afternoon trading on the New York Stock Exchange as stocks rallied a day after the Federal Reserve took aggressive steps to stimulate the economy.
Analyst David Gagliano of Barclays revised his third-quarter estimate for AK Steel to a loss of 36 cents per share from 29 cents per share, but he maintained his estimates for the fourth quarter and the full year, with a bullish view.
"AK Steel's results will improve significantly in the coming quarters, due to the combination of relatively stable finished steel prices and more significant raw material cost relief," Gagliano wrote in a research note.
The decline in AK Steel's share price was in contrast to other steel companies. Europe-based ArcelorMittal (ISPA.AS) (MT.N), the world's largest steelmaker, gained 6.1 percent to $17.39 on the NYSE, and Steel Dynamics (STLD.O) was 4.3 percent higher at $12.93 on the Nasdaq.
Analysts said the sector likely would benefit from positive signs of an improving economy, such as China's $150 billion build-out of infrastructure and the Fed's move to boost the U.S. economy.
AK Steel said it expects shipments in the third quarter to rise about 3 percent over the second quarter, but its average per-ton selling price will be down 7 percent.
It said the outlook was partly based on lower spot market prices for carbon steel products, due primarily to a decline in global economic and business conditions.
AK Steel also cited reduced raw material surcharges, due to lower raw material costs, and a lower percentage of value-added products in the total mix of shipments, due principally to market seasonality resulting from factors such as summer plant closures in the automotive industry.
The company said it expects its third-quarter results to reflect about $29 million in planned major maintenance outage expenses, compared with about $1 million in the second quarter.
(Reporting By Steve James; Editing by Steve Orlofsky and Leslie Adler)
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