AK Steel reports higher sales but net loss for Q3
AK Steel, a Fortune 500 company that produces carbon,
stainless and electrical steel products, reported its net sales for the third quarter ended September 30, 2005 rose a modest 13 percent from the third quarter 2004. The increase was due to high demand for electrical steels as well as the companys efforts to reduce costs.
Net income, however, took a nosedive; AK reported net loss of $29.0 million, or $0.26 per share of common stock, for the third quarter. Net income for the same period last year was reported as $83.1 million, or $0.76 per share. Year-to-date net income was $39.2 million, compared to year-to-date net income for the third quarter 2004 of $341.2 million.
The company cited gas disruptions following this years hurricane season as well as increased costs for steel
scrap and other raw material inputs as contributing factors to the companys net loss.
AK President and CEO James L. Wainscott said of the companys third quarter results, AK Steel continued to perform well in all the operating and quality measures within our control. Clearly, however, the significant cost increases outside our control, especially the meteoric rise in natural gas following back-to-back hurricanes, more than erased the solid progress on our other cost reduction efforts. Nonetheless, we continue to see fundamental strength for our key product lines in the fourth quarter, and we anticipate lower maintenance costs.
The company said it expects higher steel prices on lower shipments of approximately 1625000 tons in the fourth quarter, with sustained spot market pricing improvements during the fourth quarter. AK also expects its product mix to reflect a higher percentage of value-added products in the fourth quarter compared to the third quarter.
AK Steel, headquartered in Middletown, Ohio, produces flat-rolled carbon,
stainless and electrical steels, as well as
tubular steel products for the
automotive, appliance,
construction and
manufacturing markets. It has major plants and offices in Ohio, Indiana, Kentucky and Pennsylvania.