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UPDATE 1-AK Steel reports smaller loss as input costs fall
April 23, 2013 / 2:36 PM / 4 years ago

UPDATE 1-AK Steel reports smaller loss as input costs fall

* Average selling price falls 7 pct year on year

* Shipments down 3 pct

* First-quarter loss at $0.07/shr vs est loss $0.11/shr

* Revenue down 10 pct at $1.37 bln

April 23 (Reuters) - AK Steel Corp reported a smaller loss than expected for the first quarter as lower raw material costs boosted margins.

Shipments and selling prices both fell in the quarter, but the declining costs of iron ore, coal, carbon scrap and coke, along with some energy credits, offset the impact.

The steelmaker’s average selling price fell 7 percent to $1,062 per ton in the first quarter. Shipments fell about 3 percent to 1.29 million tons due to lower demand in the carbon steel spot market.

However, it said shipments to the automotive market increased during the quarter.

“While the automotive market was a bright spot for our business, markets remained challenging for some products, particularly those in the spot market,” Chief Executive James Wainscott said.

The company warned its second-quarter results would be affected by a planned outage at its Middletown blast furnace in Ohio, which would increase its maintenance outage costs to $21 million from $1 million in the year-ago quarter.

First-quarter net loss narrowed to $9.9 million, or 7 cents per share, from $11.8 million, or 11 cents per share, a year earlier.

Revenue fell 10 percent to $1.37 billion.

Analysts on average had expected a loss of 11 cents per share on revenue of $1.38 billion, according to Thomson Reuters I/B/E/S.

The company was benefited from lower raw material prices during the quarter.

Iron ore lost more than 5 percent during the first quarter, reflecting subdued demand from China amid a tepid economic recovery there.

Margins were also helped by energy credits received through the company’s contract with SunCoke Energy Inc from its Haverhill cokemaking facility in Ohio.

In September, AK Steel signed a deal to purchase coke from SunCoke Energy’s Haverhill facility for at least 12 years. As per the deal, SunCoke provided AK Steel a financial interest in the electricity co-generated from the heat recovery coke battery.

The West Chester, Ohio-based company’s stock was down 1 percent at $2.89 on Tuesday morning on the New York Stock Exchange.

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