By Tess Stynes
AK Steel Holding Corp. (AKS) said its fourth-quarter revenue
rose 36% on sharply higher shipments, spurred by strong automotive
sector demand and a boost from a recent acquisition.
Shares rose 3.7% to $4.20 in recent premarket trading as
per-share profit, excluding items, beat expectations. AK Steel and
other major U.S. steelmakers have benefited from strong demand for
automobiles but continue to face challenges from lower-priced
imports. However, a recent drop in oil prices potentially could
decimate a portion of the steel industry that has been built up
over the last few years to supply drillers in places like the
Marcellus Shale and the Gulf of Mexico.
Overall, AK Steel reported a profit of $13.5 million, or seven
cents a share, down from $35.2 million, or 26 cents a share, a year
earlier. Excluding items such as acquisition-related expenses and
pension-related charges, earnings were 14 cents. The company
expected per-share earnings of five cents to 10 cents.
Revenue increased 36% to $2 billion, while analysts polled by
Thomson Reuters expected $1.99 billion.
Average selling prices decreased 4.3% from a year earlier,
mostly on the higher proportion of hot-rolled coil shipments in the
overall sales mix stemming from its September acquisition of
Dearborn Works from Severstal PAO (CHMF.MZ). Shipments soared 42%,
amid strong demand in the automotive sector and the Dearborn Work
acquisition.
On Monday, U.S. Steel Corp. said Monday it would temporarily
curtail operations at two plants in Alabama and one in Texas,
potentially affecting 1,918 workers, as the collapse of oil prices
leads oil and gas drillers to cancel orders for steel pipes and
tubes made at the sites.
Nucor Corp. (NUE) is expected to report its fourth quarter
earnings later Tuesday morning, while U.S. Steel comes after the
market closes. Steel Dynamics Inc. (STLD) is set for Wednesday
after the bell.
Write to Tess Stynes at tess.stynes@wsj.com
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