TimkenSteel reports $50.1 million in net income for Q3

Friday, 05 November 2021 20:40:09 (GMT+3)   |   San Diego

TimkenSteel reported third-quarter 2021 net sales of $343.7 million and net income of $50.1 million. In the same quarter last year, net sales were $205.9 million with a net loss of $13.9 million. Second-quarter 2021 net sales were $327.3 million with net income of $54.0 million.

In a press release, the company said net sales of $343.7 million increased 5 percent compared with $327.3 million in the second quarter of 2021, driven primarily by higher raw material surcharges and base sales prices. The average raw material surcharge per ton increased 17 percent sequentially as a result of higher scrap and alloy prices. Compared with the prior-year third quarter, net sales increased 67 percent largely driven by improved industrial and energy demand, and a significant increase in the average raw material surcharge per ton as a result of higher scrap and alloy prices, the company said.

Ship tons of 212,700 in Q3 were essentially flat sequentially, in line with prior guidance. Industrial demand remained strong at 111,000 ship tons, energy shipments increased 48 percent sequentially to 12,900 tons and mobile shipments declined 5 percent sequentially to 88,800 tons due to the ongoing impact of the semiconductor chip shortage. The company estimates that the semiconductor chip shortage drove an approximate 15,000 ton decrease in mobile market shipments in the quarter. Compared with the prior-year third quarter, total ship tons increased 38 percent with significant increases in both industrial and energy shipments.

Manufacturing costs increased sequentially as a result of planned annual maintenance shutdown costs at the company's rolling and finishing operations. Compared with the prior-year quarter, manufacturing costs improved primarily due to higher melt utilization and the impact of systemic cost reduction actions.

As for an outlook, the company expects fourth quarter ship tons to be lower than third-quarter levels. While the company's order book is full for the remainder of 2021, it expects fourth quarter shipments will be negatively impacted by lower melt utilization as a result of the recently completed annual Faircrest melt shop maintenance shutdown. Additionally, periodic automotive customer manufacturing outages due to the semiconductor chip shortage may negatively impact fourth quarter mobile shipments.

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