AK Steel Warns of Charge, Wider Loss in 3Q

By Jennifer Booton Industrials FOXBusiness

AK Steel (AKS) warned on Friday that average selling prices will be lower in the third quarter and that it expects to incur a non-cash tax charge of around $29 million.

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The one-time maintenance outage expense of $29 million, compared with just $1 million recorded in the second quarter of 2012, is expected to impact earnings per share by 26 cents.

The West Chester, Ohio-based producer of flat-rolled carbon, stainless and electrical steels expects to record a quarterly loss of 60 cents to 65 cents a share, below the 20-cent loss forecasted by analysts in a Thomson Reuters poll.

Excluding the special item, AK Steel would be above Wall Street’s consensus.

Shares of AK Steel fell nearly 3.5% to $6.21 on the outlook.

While shipments are projected to be about 3% higher from the second quarter to around 1.37 million tons, AK Steel forecasts average per-ton selling prices will be down about 7%.

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AK Steel cited lower spot market prices for carbon steel products to a decline in global economic and business conditions, reduced raw material surcharges and a lower percentage of value-added products among the mix of its shipments.