TimkenSteel today reported fourth-quarter net sales of $214.7 million and a net loss of $67.0 million. This compares with net sales of $206.6 million and a net loss of $13.8 million in the same quarter last year, and net sales of $213.8 million and a net loss of $22.2 million in the third quarter of 2016.
For the full year, net sales were $869.5 million and net loss was $105.5 million. This compares with net sales of $1,106.2 million and a net loss of $45.0 million for full-year 2015.
“Throughout 2016, we structurally improved the operating performance of the company in the face of weak global commodity markets and high customer inventory levels,” said Tim Timken, chairman, CEO and president. “We expect 2017 to be a better year, starting off with projected sales in the first quarter that are higher than the typical seasonality.”
Fourth-quarter net sales increased $8.1 million or 3.9 percent year over year and held flat sequentially.
Ship tons were approximately 193,000, an increase of 10.1 percent over the fourth quarter of 2015 and 8.6 percent sequentially. Gains were related primarily to market penetration and sales initiatives, including winning new business supplying billets to tube makers.
Melt utilization was 50 percent for the quarter, compared with 41 percent in fourth-quarter 2015 and 44 percent in third-quarter 2016. Higher volumes, primarily from new business, improved melt utilization and leveraged manufacturing costs.
For the first quarter of 2017, the company expects shipments to be approximately 70,000 to 80,000 tons higher (or about 40 percent higher) than fourth-quarter 2016 based upon improving sentiment across all markets. Shipments of billets to tube makers projected to be about 50,000 tons. Melt utilization is expected to increase from 50 percent to about 70 percent, primarily driven by incremental billet production. Net income in Q1 2017 is projected to be between $2 million and $12 million.