AK Steel Reports Sales Bump of 8.2%
By Metal Center News Staff
on Apr 30, 2018
Despite higher first-quarter sales, AK Steel saw a significant year-over-year decrease in net income to start the year. The West Chester, Ohio-based steelmaker reported net income of $28.7 million in the first quarter of 2018, compared with net income of $84.4 million in the year-ago period.
Higher steel selling prices and the effect of AK Steel’s acquisition of Precision Partners were offset by higher costs associated with an unplanned outage at the company’s Middletown Works and increased raw material costs, according to AK Steel.
“Our first quarter 2018 operating performance benefited from a favorable pricing environment and solid demand across most end markets, including automotive,” said CEO Roger Newport. “Our performance was tempered by the previously disclosed unplanned outage at our Middletown Works in January.”
Net sales in the quarter increased 8.2 percent to $1.7 billion, despite a slight decrease in shipments. Total flat-rolled steel shipments in the quarter were 1.4 million tons, compared with 1.5 million tons a year ago.
Looking ahead, AK Steel said it anticipates stronger market conditions in the second quarter, with shipments of carbon and stainless steels, as well as tubular and stamping products, expected to benefit from a strengthening automotive market. Flat-rolled shipments are projected to increase 5-7 percent from the first quarter of 2018, according to the company.
“We remain optimistic about 2018, as we expect automotive and other key end use markets to remain strong,” Newport said, adding that collaborative efforts between Precision Partners, AK Tube, and AK Steel’s technical and research teams are gaining traction at key automotive customers.
Newport also hinted at potential headwinds posed by foreign products. “The high level of imports, particularly the ongoing surge of foreign electrical steel, remains a challenge and we will continue to work proactively with the Trump Administration to ensure fair and appropriate trade policies.”