AK Steel today reported its financial results for the first quarter of 2019. The company reported sales $1,697.7 million, a 2 percent increase from first quarter 2018, and a net loss of $4.5 million, including the Ashland Works closure charge of $77.4 million. Excluding this item, adjusted net income was $72.9 million. Comparatively, net income was $28.7 million for the first quarter of 2018.
"Our solid first quarter operating performance benefitted from our annual customer contract renewals. A higher proportion of contractual sales helps to reduce the volatility in our business and this was reflected in our first quarter results," said Roger K. Newport, Chief Executive Officer. "We also continued to strengthen our position with automotive manufacturers by commercializing new steel solutions, including through our downstream tubing and stamping operations."
The company attributed the increase in net sales to higher selling prices for most products and increased shipments to the distributors and converters market, partly offset by lower shipments to the automotive market, as the company said it expected.
As for an outlook, AK Steel said in a statement that based on the change in hot-rolled carbon spot market pricing from approximately $720 per ton in January to about $690 per ton currently, the company is updating its annual guidance. The company's annual guidance had indicated that for every $10 change in the carbon hot-rolled coil spot market price, annual earnings would be impacted by $5 to $7 million. Accordingly, the company now expects net income to be in the range of $76 to $96 million for the full-year 2019.