AK Steel provided guidance Friday for its third quarter 2015 financial results. AK Steel said that it expects to report a net loss of $0.02 to $0.07 per diluted share of common stock for the third quarter of 2015, reflecting an improvement from the net loss of $0.36 per diluted share in the second quarter of 2015. AK Steel said it expects the positive financial effects of higher shipments, lower raw material costs, cost reduction efforts and higher operating rates will partially offset lingering low carbon steel spot market prices.
For the third quarter of 2015, AK Steel expects shipments of approximately 1,860,000 tons, an increase of approximately 3 percent compared to the second quarter of 2015. The increase in shipments quarter over quarter is primarily related to increased shipments to the automotive market.
AK Steel expects an average selling price of approximately $910 per ton for the third quarter of 2015, about 2 percent lower than the second quarter of 2015. The decrease in average selling price is primarily a result of lower carbon steel spot market pricing, which the company believes is principally driven by high levels of unfairly traded foreign steel imports. Lower costs for raw materials (principally iron ore pellets and carbon scrap) and energy, along with the results of continued efforts across the company to reduce costs, partially offset the effects of lower steel selling prices.
The company said that it expects to record income tax expense of approximately $0.12 per diluted share for the third quarter of 2015 as a result of year-to-date effects of an increase in the company’s estimated LIFO income. The company’s income tax provision is primarily related to changes in the company’s LIFO reserve, which results in a tax valuation allowance adjustment related to the company’s deferred tax assets.