Steel Mills
Outages and Weather Reduce Q1 Results for AK Steel
Written by Sandy Williams
March 21, 2014
AK Steel expects to report a net loss of $0.44 to $0.49 per diluted share for the first quarter of 2014 due to outages and weather related energy costs, according to earnings guidance released by the company.
Significant costs of $47 million resulted from the unplanned outage of the Ashland Works blast furnace and planned maintenance for the facility that was moved from second quarter to first quarter. The extreme winter weather added an additional $30 million of energy costs for electricity and natural gas during the quarter. AK Steel also incurred a $5.8 million charge for tentative settlement of pending litigation.
Steel shipments decreased by 10-12 percent and will be in the range of 1.25 to 1.275 million tons, down from 1.420 million tons in fourth quarter 2013. Most of the reduction is a result of the unexpected blast furnace outage at Ashland Works that reduced shipments of carbon steel to the spot market and shipments of electrical steel.
A higher mix of value-added products contributed to an increase of 6 percent for an average selling price of $1,095 in the first quarter.
AK Steel expects higher pre-tax costs in first quarter due to higher iron ore and scrap costs. No significant outages are planned for second quarter and first quarter costs are not expected to continue in subsequent quarters this year.
Sandy Williams
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