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AK Steel Updates Second Quarter 2009 Outlook
05/06/2009 - AK Steel adjusts its outlook for the second quarter to operating loss of $75 to $80 million based on recent plant closure announcements by Chrysler and General Motors.
AK Steel has adjusted its outlook for the second quarter based on recent announcements by Chrysler and General Motors, saying that it now expects to report an operating loss of $75 to $80 million.
The General Motors announcement detailed plans to idle more than half of its North American plants for up to nine weeks, beginning in mid-May. Chrysler LLC also will idle all of its plants pending completion of the proposed sale of its assets to a new company as part of its recently announced bankruptcy proceedings.
AK Steel said the announced automotive shutdowns would likely reduce its direct shipments to these customers, as well as shipments to other AK Steel customers who also supply to the automakers. As a consequence of the reduced shipments, AK Steel anticipates that its second quarter shipments likely will be closer to 725,000 tons rather than the 800,000 tons estimated in its initial guidance. Based on the anticipated reduction in shipments, AK Steel now anticipates its average per-ton selling price for the second quarter will decrease by approximately 3 to 4% compared to the first quarter.
AK Steel now expects that it will incur an operating loss of $75 to $80 million for the second quarter. Although the loss would be higher than $50-million loss estimated in the company’s previous outlook, it would still be an improvement over its first-quarter operating loss of $99.9 million.
AK Steel provided the update to its previous guidance in its quarterly report on Form 10-Q for the first quarter of 2009.
AK Steel produces flat-rolled carbon, stainless and electrical steels, primarily for automotive, appliance, construction and electrical power generation and distribution markets. The company employs about 6200 men and women in Middletown, Mansfield, Coshocton and Zanesville, Ohio; Butler, Pa.; Ashland, Ky.; Rockport, Ind.; and its corporate headquarters in West Chester, Ohio.
AK Tube LLC, a wholly owned subsidiary of AK Steel, employs about 260 men and women in plants in Walbridge, Ohio, and Columbus, Ind. AK Tube produces carbon and stainless electric resistance welded (ERW) tubular steel products for truck, automotive and other markets.
