AK Steel (AKS) on Wednesday detailed a strong earnings outlook for the fourth quarter, stating that it expects shipments to increase 37 percent sequentially driven by acquisitions and strong demand from the auto industry. Shares of the steel maker rose 6 percent in the after-hours trade, following the news.
West Chester, Ohio-based AK Steel expects fourth-quarter earnings of $0.05 to $0.10 per share, excluding the effects of acquisition-related expenses pertaining to its recent purchase of Severstal Dearborn. Analysts polled by Thomson Reuters currently expect earnings of $0.04 per share for the quarter. Analysts' estimates typically exclude special items.
For the fourth quarter, the company expects shipments of about 2 million tons, an increase of about 37 percent from the third quarter, driven by the acquisition of Dearborn Works and continued strong demand from the automotive market.
Meanwhile, the company expects its average selling price for the fourth quarter at about $980 per ton, nearly 10 percent less than the third quarter, hurt mainly by a higher percentage of product shipments to the carbon spot market.
The company also expects to report higher earnings before interest, taxes, depreciation and amortization, despite incurring costs of $31 million associated with a planned Ashland Works blast furnace outage.
"The company believes that the reline of the blast furnace hearth will position it well to provide stable blast furnace operations in the future by allowing the company to avoid the unplanned disruptions that have occurred throughout 2014," AK Steel said in a statement.
AKS closed Wednesday's trading at $5.56, up $0.32 or 6.11%, on the NYSE. The stock further gained $0.32 or 5.76% in the after-hours trade.
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