AK Steel Reports Higher Steel Prices & Better Sales For Second Quarter 2011
AK Steel reported its financial earnings for the second quarter 2011. AK Steel’s net income was $33.1 million, up from $26.7 million for 2Q10. Net sales and shipments increased for the second quarter from $1,596.1 million on shipments of 1,449,400 in 2Q10 to $1,791.9 million on shipments of 1,497,000 tons this quarter. The average selling price increased 7% from 1Q11 and was 8% higher than 2Q10 at $1,185 per ton for the third quarter.
In a note to his customers, KeyBanc steel analysts Mark Parr reported the AK Steel earnings of $.30 per share as being below estimate of $.55 per share and market consensus of $.50 per share. “This miss was related to higher than expected raw material costs (likely iron ore), while average selling prices and shipment volumes were virtually equal to our assumptions.”
James L. Wainscott, Chairman, President and CEO, said “In fact, despite experiencing much higher iron ore prices than anticipated, we achieved our best quarter in the past six quarters in terms of shipments, operating profit, net income and earnings per share.”
These positive first-half 2011 results in sales were offset by raw material cost increases like iron ore and coal. Although, the first six months of 2011 showed shipments of 2,920,100 tons compared to 2,835,200 tons in the first-half of 2010. The company expects the third quarter to have shipments between 1,400,000 and 1,450,000 tons with a lower selling price (1%). AK Steel predicts raw material costs to increase further, lowering their operating profit to $15 per ton in the third quarter compared to the 2Q11 profit of $46 per ton.
Source: AK Steel