AK Steel (AKS) Tops Q1 EPS by 10c

AK Steel (NYSE: AKS) reported Q1 EPS of $0.23, $0.10 better than the analyst estimate of $0.13. Revenue for the quarter came in at $1.7 billion versus the consensus estimate of $1.74 billion.

GUIDANCE:

AK Steel sees FY2019 EPS of $0.48-$0.54, versus the consensus of $0.47.

• Based on the change in hot-rolled carbon spot market pricing from approximately $720 per ton in January to about $690 per ton currently, the company is updating its annual guidance. The company’s annual guidance had indicated that for every $10 change in the carbon hot-rolled coil spot market price, annual earnings would be impacted by $5 to $7 million. Accordingly, the company now expects net income to be in the range of $76 to $96 million, or $0.24 to $0.30 per diluted share. Excluding the impact of the Ashland Works closure, adjusted net income is expected to be in the range of $153 to $173 million, or $0.48 to $0.54 per diluted share, and adjusted EBITDA to be in the range of $505 to $525 million. This updated guidance aligns with the company’s previous guidance.
• Other outlook items include:
• The company’s adjusted net income and adjusted EBITDA guidance exclude the effects of the Ashland Works charge of $77.4 million recorded in the first quarter of 2019, as discussed above.
• Planned maintenance outage expenditures in 2019 are still expected to be $70 to $80 million and substantially heavier in the second and fourth quarters. As a result, the company expects to have a similar level of adjusted EBITDA between the first half and the second half of the year.
• The company expects working capital to be a small source of cash for the year. In January, the company had indicated that working capital would be a small use of cash.
• The other annual guidance items remain unchanged from the company’s January guidance.

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

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