AK Steel, Middletown, Ohio, reported a net loss of $5.8 million in the third quarter, a reversal from the $50.9 million in income during the same period in 2016. Net income through three quarters of $117.9 million remained more than double the total through the first three quarters of the previous year.
Net sales increased 3 percent to $1.49 billion for the third quarter compared with 2016. Year-to-date net sales of $4.6 billion were up 2.7 percent from the previous year.
"Our financial results for the third quarter are in line with the guidance we provided in July. We are particularly pleased to have completed the acquisition of Precision Partners during the quarter as we execute on our downstream strategy," said CEO Roger K. Newport during the company’s quarterly conference call.
The company’s net shipments in the quarter totaled 1.37 million tons, a 2.1 percent decline from third-quarter 2016. For the year to date, tons shipped were down 6.4 percent to 4.26 million. The reduction in shipments was primarily a result of continued efforts to reduce sales of lower-margin products, as well as a decrease in automotive market demand.
The average selling price per flat-rolled steel ton increased 2.0 percent to $1,021, a result of higher average selling price on both contract and spot market sales, plus higher surcharges on specialty steels. However, higher raw material costs, particularly for scrap, chrome, zinc and other alloys, contributed to the decline in results.
In August, the company acquired 100 percent of the equity of Precision Partners, which provides engineering, tooling, die design and hot- and cold-stamped steel components for the automotive market. AK Steel acquired the Ontario-based company to advance its core focus on the high-growth automotive lightweighting market.