AK Steel Holding Corporation (NYSE:AKS) slipped to a loss of $4.5 million or a penny per share in the first quarter of 2019, from a profit of $ $28.7 million or 9 cents in the prior-year quarter.
The bottom line in the reported quarter was hit by charges of $77.4 million related to Ashland Works facility closure.
Barring one-time items, adjusted earnings per share came in at 23 cents for the quarter. The figure topped the Zacks Consensus Estimate of 12 cents.
Net sales of $1,697.7 million in the quarter rose around 2% year over year, but missed the Zacks Consensus Estimate of $1,725.7 million. Increased selling prices for most products and higher shipments to the distributors and converters market were partly offset by reduced shipments to the automotive market.
Pricing and Shipments
Flat-rolled steel shipments in the quarter were down around 3% year over year to 1,388,400 tons. Average selling price per ton for flat-rolled steel rose 6% to $1,112.
Financials
AK Steel exited the quarter with cash and cash equivalents of $41.2 million, down 7% year over year. The company’s long-term debt declined around 3% year over year to $2,037.7 million.
Cash outflow from operating activities was $7.9 million for the quarter compared with cash flow of $65.6 million a year ago.
Guidance
AK Steel cut its profit forecast for 2019 factoring in the change in hot-rolled carbon spot market pricing. The company now sees net income to be in the range of $76-$96 million or 24-30 cents per share for the full year, down from its previous view of $160-$180 million or 51-57 cents per share.
Adjusted net income for 2019 is forecast to be in the range of $153-$173 million or 48-54 cents per share. Adjusted EBITDA is expected between $505 million and $525 million, down from the company’s earlier view of $515 million and $535 million.
AK Steel expects planned maintenance outage expenses for 2019 to be $70-$80 million.
Price Performance
Shares of AK Steel have lost 46.3% in the past year compared with the industry’s 28.7% decline.
Zacks Rank and Stocks to Consider
AK Steel currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Sandstorm Gold Ltd. (NYSE:SAND) , Flexible Solutions International Inc. (NYSE:FSI) and Israel Chemicals Ltd. (NYSE:ICL) .
Sandstorm Gold has an expected earnings growth rate of 200% for the current year and carries a Zacks Rank #1 (Strong Buy). The company’s shares have gained around 10% over the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Flexible Solutions has an expected earnings growth rate of 171.4% for the current year and carries a Zacks Rank #2 (Buy). Its shares have rallied roughly 99% in the past year.
Israel Chemicals has an expected earnings growth rate of 13.5% for the current year and carries a Zacks Rank #2. Its shares have gained around 13% in the past year.
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Israel Chemicals Shs (ICL): Free Stock Analysis Report
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AK Steel Holding Corporation (AKS): Free Stock Analysis Report
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