TimkenSteel reported that it expects first-quarter net sales of approximately $309 million on 280,000 ship tons and a net loss of approximately $5 million, as compared with fourth-quarter 2016 net sales of $215 million and a net loss of $67 million.
The company expects EBITDA for the quarter to be approximately $17 million, which is lower than its original guidance. TimkenSteel will release full financial results for the first quarter on Thursday, April 27.
“Quarter-over-quarter sales have increased by about 45 percent primarily due to increasing demand and new business,” said Tim Timken, chairman, CEO and president, in a statement. “The sequential improvement in structural EBITDA was about $15 million, which is significant, although below our original expectations due to the timing of capturing manufacturing leverage. As we ramp production, we’re hiring to increase capacity to serve rebounding demand while also drawing from inventory in greater proportions than we had anticipated.”
The company statement said manufacturing costs were favorable as melt utilization increased from 50 percent in fourth-quarter 2016 to 71 percent in first-quarter 2017, adding that favorable raw material spread was largely driven by increase in scrap and alloy indices.