AK Steel (AKS) Reaches Labor Agreement At Butler Works

AK Steel (NYSE:AKS) said that members of the United Auto Workers (“UAW”), Local 3303, have ratified a new two-and-a-half year labor agreement. The contract was ratified in voting held on Aug 8 and 9 in Butler, PA and will be in effect until Apr 1, 2019.

The agreement covers around 1,200 hourly production and maintenance employees at AK Steel’s Butler Works facility that makes a vast range of flat-rolled steel products (including electrical steels) and a variety of stainless and carbon steels. The new agreement positions the company well to address the future needs of its customers.

AK Steel’s shares closed 0.6% higher at $5.34 on Aug 11.

AK Steel, which is among the prominent U.S. steel makers along with U.S. Steel (NYSE:X) , Nucor (NYSE:NUE) and Steel Dynamics (NASDAQ:STLD) , logged a profit of $17.3 million or 8 cents per share in second-quarter 2016, as against a net loss of $64 million or 36 cents per share in the year-ago quarter. Earnings per share beat the Zacks Consensus Estimate of a loss of 4 cents.

The company’s adjusted EBITDA more than doubled year over year in the quarter, aided by a better product mix, operational improvements, cost-reduction actions and lower raw material and energy costs.

Revenues, however, fell around 11.8% year over year to $1.49 billion and missed the Zacks Consensus Estimate of $1.51 billion. Lower automotive contract pricing and reduced shipments hurt the top line.

Shipments for the quarter went down 14% year over year to 1,555,500 tons, reflecting management’s decision to reduce exposure to the commodity carbon steel spot market.

The company expects a modest decline in shipments in the third quarter compared to the second due to planned manufacturing outages and shutdowns at certain automotive customer facilities.

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