AK Steel Provides Second Quarter 2013 Guidance
06/17/2013 - For the second quarter of 2013, AK Steel said it expects increased shipments to the automotive market and carbon spot market compared to the previous quarter.
AK Steel provided guidance for its second quarter of 2013 financial results.
AK Steel said that it expects shipments of approximately 1,340,000 to 1,360,000 tons in the second quarter of 2013 compared to shipments of 1,289,800 tons in the first quarter of 2013, an increase of approximately 4% to 5%. For the second quarter of 2013, the company said it expects increased shipments to the automotive market and carbon spot market compared to the previous quarter.
The company expects its average selling price per-ton for the second quarter of 2013 to decrease by approximately 1%, to about US$1,055 per ton, from its average selling price per ton of US$1,062 for the first quarter of 2013. The expected decrease in average selling price is primarily due to lower spot market prices for carbon steel products compared to the previous quarter. Despite this quarter over quarter reduction, pricing has been more favorable in recent weeks and on 23 May 2013 and 13 June 2013, the company announced price increases on carbon flat-rolled steel products. As a result, the company's spot market selling prices have improved recently and the company expects to continue to benefit in future months from these announced price increases.
As previously disclosed, the company's second quarter results will include the effect of a planned seven-day maintenance outage at its Middletown blast furnace, which was the first major maintenance outage that has been required for that furnace since a reline in 2009. Total maintenance outage costs, including for the Middletown blast furnace, are expected to be about US$21 million in the second quarter, compared to US$1 million in the first quarter, representing an increase of approximately US$20 million in costs from the prior quarter. The company does not have any other planned blast furnace maintenance outages for the remainder of 2013.
AK Steel said that it expects to record a non-cash income tax expense of approximately US$11 million, or US$0.08 per diluted share of common stock, for the second quarter of 2013 using the discrete tax method. In the first quarter of 2013, the company recorded a tax benefit of US$2.8 million, or US$0.02 per diluted share. As a result, the company expects its tax expense to be approximately US$14 million, or US$0.10 per diluted share, higher in the second quarter of 2013 as compared to the first quarter of 2013. The company currently estimates an income tax expense for the year of approximately US$15 million. The company's income tax provision is primarily related to changes in the company's LIFO reserve, which results in a tax valuation allowance adjustment related to the company's deferred tax assets and could affect this estimate.
As a result, AK Steel said it expects to incur a net loss of between US$0.33 and US$0.38 per diluted share of common stock for the second quarter of 2013.
