West Chester, Ohio-based AK Steel reported Monday a net income of $39.8 million for the fourth quarter of 2009, ended Dec. 31, 2009, compared with a loss of $430.6 million in the same quarter of 2008.
The 2009 results include a $5.1 million charge related to a state tax law change in Pennsylvania, where AK Steel operates one of its steelmaking facilities. The 2008 fourth-quarter results included $699.5 million in pre-tax, non-cash pension charges primarily related to the company’s unique “corridor” accounting requirement. There were no corridor charges in 2009.
Net sales in Q4 were $1.31 billion, versus $1.45 billion in the same quarter of last year. AK Steel shipped 1,368,300 net tons of steel in the fourth quarter, compared to 1,073,500 in the respective quarter of 2008. While the increased quarterly shipments reflect a year-over-year improvement in the demand for steel, 2009 fourth-quarter revenues and average selling prices were lower than they were in the same quarter of 2008, as US and global markets continue a gradual recovery.
The firm experienced an operating profit of $87 million, or $64 per ton, compared to an operating loss of $689.2 million, or $642 per ton, for the 2008 fourth quarter, which included the pre-tax, non-cash charges previously mentioned.
For the full-year 2009, AK Steel reported a net loss of $74.6 million, compared to net income of $4 million in 2008. Net sales for 2009 fell to $4.07 billion from sales of $7.64 billion in 2008. Shipments for the year totaled 3,935,500 tons, compared to 5,866,000 tons in 2008.
The company posted a 2009 operating loss of $70.1 million, or $18 per ton, compared to a 2008 operating profit of $28 million, or $5 per ton. AK Steel explained that the decline in shipments and revenues was a reflection of the significant decline in the economy, and the resultant decline in demand for steel products, especially in the first half of 2009.
“AK Steel met the severe economic crisis of 2009 head-on and emerged as a stronger company,” said James L. Wainscott, chairman, president and CEO. “Our quick action and relentless focus on the fundamentals in 2009 allowed us to return to operating and net profitability by the third quarter, and we expect to build upon that success in 2010.”
The company expects its first-quarter 2010 shipments to approximate its fourth-quarter 2009 levels, while average selling prices are expected to rise approximately four to five percent over the previous quarter levels. The company anticipates lower operating and maintenance costs compared to the fourth quarter of 2009.
In addition, while the company recorded a significant LIFO credit in the fourth quarter of 2009, it expects to incur a LIFO charge in the first quarter of 2010, as well as higher costs for raw materials. As such, AK Steel expects to report an operating profit of approximately $35 per ton for the first quarter of 2010.