TimkenSteel today reported second-quarter 2022 net sales of $415.7 million and net income of $74.5 million, or $1.42 per diluted share. This compares with the company's sequential first-quarter 2022 net sales of $352.0 million and net income of $37.1 million, or $0.70 per diluted share. In the same quarter last year, net sales were $327.3 million with net income of $54.0 million, or $0.98 per diluted share.
In a press release, the company said the increase in net sales was primarily driven by an increase in average raw material surcharge per ton as a result of higher scrap and alloy prices, as well as higher ship tons and base sales prices. Compared with the prior-year second quarter, net sales increased 27 percent primarily driven by an increase in average raw material surcharge per ton as a result of higher scrap and alloy prices, as well as higher base sales prices, the company said.
Ship tons of 208,900 increased 12,500 tons sequentially, or 6 percent, consistent with expectations and driven by higher industrial and energy shipments, the company said. Compared with the prior-year second quarter, ship tons decreased 2 percent with decreases in industrial and mobile partially offset by higher energy demand.
Manufacturing costs increased sequentially by $13.0 million primarily driven by higher maintenance and variable compensation expense. Melt utilization was 84 percent in the second quarter of 2022, an improvement from the first quarter and consistent with the prior-year second quarter. Compared with the prior-year second quarter, manufacturing costs increased $25.9 million primarily driven by inflation and an increase in maintenance costs.
As for an outlook, the company expects adjusted EBITDA to remain strong in the third quarter with steady customer demand. Third quarter adjusted EBITDA is anticipated to be lower than the second quarter primarily driven by a market decline in scrap prices, which is expected to reduce surcharge revenue per ton, as well as the impacts from a recent operational disruption, which the company said it estimates will result in melt shop downtime through mid-August.