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AK Steel Holding Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: July 27, 2012 04:24PM

AK Steel Holding Corp. (AKS) filed Quarterly Report for the period ended 2012-06-30. Ak Steel Holding Corporation has a market cap of $582.4 million; its shares were traded at around $4.95 with and P/S ratio of 0.1. The dividend yield of Ak Steel Holding Corporation stocks is 3.8%.



Highlight of Business Operations:

In the second quarter of 2012, the Company experienced a decline in revenue of approximately 14% from the second quarter of 2011. This was principally attributable to a decline in shipments compared to the second quarter of 2011, combined with a decline in the average selling price. The Company s average selling price for the second quarter of 2012 was $1,152 per ton, a decrease of approximately 3% from the Company s average selling price of $1,185 per ton for the second quarter of 2011. The Company's steelmaking costs were lower in the second quarter of 2012 compared to the same period in 2011.

Total shipments were 1,335,800 tons and 1,497,000 tons for the three months ended June 30, 2012 and 2011, respectively. Total shipments were 2,661,700 tons and 2,920,100 tons for the six months ended June 30, 2012 and 2011, respectively. The decline in total shipments in the second quarter of 2012 compared to the prior year was attributable principally to unfavorable spot market pricing, which caused the Company to curtail sales of certain products. Reduced demand due to domestic and global economic conditions also contributed to the decline in shipments. For the three months ended June 30, 2012, value-added products comprised 85.2% of total shipments compared to 82.1% for the three months ended June 30, 2011. For the six months ended June 30, 2012, value-added products comprised 84.9% of total shipments compared to 84.0% for the six months ended June 30, 2011. The Company continued to focus on maximizing profitability through product mix adjustments based on current and projected market demands—both domestically and internationally. The following table presents net shipments by product line:

For the three months ended June 30, 2012, net sales were $1,538.4, a 14% decrease from net sales of $1,791.9 for the three months ended June 30, 2011. For the six months ended June 30, 2012, net sales were $3,047.1, a 10% decrease from net sales of $3,373.0 for the six months ended June 30, 2011. The Company s average selling price for the second quarter of 2012 was $1,152 per ton, a decrease of approximately 3% from the Company s average selling price of $1,185 per ton for the second quarter of 2011. The Company s average selling price for the six months ended June 30, 2012 was $1,145 per ton, a slight decrease from the Company s average selling price of $1,148 per ton for the six months ended June 30, 2011. The lower average selling price for second quarter 2012 over second quarter 2011 was driven principally by lower selling prices for spot market sales, offset partly by a richer product mix and increased contract sales. Net sales to customers outside the United States for the three and six months ended June 30, 2012 totaled $224.4 and $449.5, respectively, compared to $272.9 and $490.9, for the three and six months ended June 30, 2011, respectively.

The Company reported operating profit of $56.7, or $42 per ton, and $60.8, or $23 per ton, in the three and six months ended June 30, 2012, respectively. These results compare to operating profit of $68.5, or $46 per ton, and $88.0, or $30 per ton, in the three and six months ended June 30, 2011, respectively. For the six months ended June 30, 2012, the Company experienced year-over-year decreases in its average selling price, lower sales volumes and higher coal costs, partially offset by decreases in energy costs. Included in operating profit was operating profit (loss) related to SunCoke Middletown of $10.6 and $(1.2) for the three months ended June 30, 2012 and 2011, respectively, and $18.5 and $(1.5) for the six months ended June 30, 2012 and 2011, respectively.

That market has been continually improving and the growth in sales to that market is one of the Company s success stories in 2012. Since dropping to only about 8.5 million units in 2009, North American light vehicle production has steadily recovered and reached nearly 13.0 million units in 2011. It is expected to increase to more than 14.5 million units in 2012, and continue to increase in 2013 and thereafter. As a result of this improving trend, the Company s shipments of both carbon and auto-chrome stainless steels have increased significantly since last year. In the first half of 2012, the Company s direct shipments to its automotive customers of carbon and auto-chrome stainless steels increased approximately 20% compared to the same period of 2011.

Read the The complete Report



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