AK Steel (AKS) Misses Q3 EPS by 2c

AK Steel (NYSE: AKS) reported Q3 EPS of $0.21, $0.02 worse than the analyst estimate of $0.23. Revenue for the quarter came in at $1.74 billion versus the consensus estimate of $1.81 billion.

OutlookThe company anticipates that market conditions will remain strong in the fourth quarter. Accordingly, the company expects:

• Fourth quarter flat rolled steel shipments to be essentially flat compared to the third quarter, as the seasonal slowdown in automotive shipments is offset by strong demand from the distributors and converters market, which includes spot market opportunities.
• Due to the shift in mix from seasonally lower automotive shipments and increased sales into the distributors and converters market, including spot market sales, our average selling price will decline by about 2 to 3 percent. Increased shipments into the distributors and converters market will reduce our average selling price, as products sold into those markets typically have lower selling prices than most of our other products.
• We expect planned outage costs to be approximately $15 million in the fourth quarter compared to $4.7 million in the previous quarter.
• Adjusted EBITDA margin is expected to decline by around 150 basis points in the seasonally weaker fourth quarter compared to the third quarter, which was the highest quarterly adjusted EBITDA margin in 2018. Even with the expected margin decline, the company expects that fourth quarter adjusted EBITDA will be significantly stronger than a year ago and among our best fourth quarter adjusted EBITDA performances in the last 10 years.

For earnings history and earnings-related data on AK Steel (AKS) click here.

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