AK Steel Holding Corporation (AKS) recently announced that a recognition has been bestowed on the Walbridge, Ohio plant of its subsidiary AK Tube LLC by the Ohio Bureau of Workers' Compensation, Division of Safety and Hygiene. The plant has been acknowledged for its excellent safety performance.
Last year, operations at the Walbridge plant were carried out without any lost time injuries or illnesses, an achievement which made the plant eminently suitable for the “100% Award for Safety”. The award was conferred on the plant for the fourth time and it also received another special award for safety for operating 808,581 hours without a lost-time injury between March 17, 2009, and December 31, 2011.
Additionally, leading trade organization Fabricators and Manufacturers Association, International (FMA) granted the “Safety Award of Merit” to the plant this year.
AK Steel, a leading producer of flat-rolled carbon, stainless, electrical steel and tubular products, released its first-quarter 2012 results in April 2012. Net loss of 11 cents a share for the quarter matched the Zacks Consensus Estimate. Revenues dipped 4.6% year over year to $1,508.7 million, trailing the Zacks Consensus Estimate.
Shipments fell 6.8% year over year while average selling price moved up 3% in the quarter. Selling price benefited from a better product mix, higher contract sales and increased prices for certain products. AK Steel also witnessed a slow but steady improvement in underlying market conditions during the quarter.
Moving ahead, the company expects to post a profit in the second quarter. It remains optimistic that business conditions will improve in the quarter on the back of increased strength in the automotive market. The company further anticipates that shipments will be higher in the second quarter and expects raw material costs to be lower sequentially.
However, the current economic scenario is still grim for AK Steel which is affected by weak construction and housing sectors. The company is also exposed to macroeconomic uncertainties, stemming from the sovereign debt crisis in Europe and sluggish growth in Asia. Moreover, electrical steel prices remain under pressure in overseas markets given the soft operating backdrop.
AK Steel, which competes with Nucor Corporation (NUE), U.S. Steel Corp. (X) and Steel Dynamics Inc. (STLD), currently holds a short-term Zacks #3 Rank (Hold). We have a long-term Neutral recommendation on the stock.
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