UPDATE 1-AK Steel sees Ohio blast furnace outage hurting third qtr

Tue Jul 23, 2013 10:14am EDT

* Second-quarter loss/share $0.30 vs loss $6.55/share year earlier

* Net sales fall 9 percent

* Expects uninsured losses of $12-$17 mln in second half

* Shares fall 3 percent before the bell

July 23 (Reuters) - AK Steel Holding Corp said it expects to incur additional expenses in the third quarter related to an unplanned outage at its Middletown blast furnace in Ohio.

The steelmaker forecast total uninsured losses between $12 million and $17 million for the second half of the year.

The timing and amount of any insurance recovery could not be accurately predicted at present and could occur after the third quarter, AK Steel said on Tuesday as it reported its second-quarter results.

The West Chester, Ohio-based company said last month that its shipments and financial results would be hurt in the second and the next quarters due to an outage at the Middletown blast furnace. It had to take the furnace offline after a mechanical failure in the charging apparatus.

AK Steel makes flat-rolled carbon, stainless and electrical steels and tubular products, mainly for automotive, infrastructure and manufacturing, construction and electrical power generation markets.

The company had said it would use its Butler electric arc furnace in Pennsylvania and its Ashland blast furnace in Kentucky until the Middletown furnace was repaired.

The company's net loss narrowed to $40.4 million, or 30 cents per share, in the quarter ended June from $724.2 million, or $6.55 per share, a year earlier.

The latest quarter results included expenses of about $6.2 million, or 5 cents per share on a pre-tax basis, related to the outage.

Net sales fell 9 percent to $1.40 billion.

Shipments fell 1 percent to 1,323,700 tons due to the blast furnace outage and lower deliveries to the carbon spot and electrical steel markets.

Average selling price fell 8 percent to $1,061 per ton in the quarter due to lower spot market prices for carbon steel products, reduced raw material surcharges and lower selling prices for electrical steel products globally.

The global steel market has excess capacity of around 334 million tonnes. That glut is pressuring steel prices with global demand only forecast to grow by 2.9 percent this year, and by a similarly slow 3.2 percent in 2014, based on estimates by the World Steel Association.

AK Steel shares were down about 1 percent at $3.41 on the New York Stock Exchange on Tuesday.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.