AK Steel's (AKS) Earnings And Revenues Beat Estimates In Q4

AK Steel Holding Corporation (NYSE:AKS) reported net loss of $107.9 million or 34 cents per share in the fourth quarter of 2017 as compared to the net loss of $62.4 million or 22 cents recorded in the prior-year quarter.

Barring one-time items, adjusted loss for the quarter came in at 6 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 14 cents.

Total operating costs in the quarter rose around 7.2% year over year to roughly $1,532.4 million.

Net sales of $1,495.6 million for the fourth quarter rose 5.4% year over year, which also topped the Zacks Consensus Estimate of $1,436 million.

2017 Results

For full-year 2017, AK Steel reported adjusted net earnings of $98.4 million or 31 cents per share as compared to adjusted net earnings of $129.8 million or 56 cents in 2016.

Net sales for the full year went up roughly 3% year over year to $6.08 billion.

Pricing and Shipments

Flat-rolled steel shipments for the fourth quarter were down around 3.5% year over year to 1,337,100 tons, mainly due to a decline in automotive demand. Average selling price per ton for flat-rolled steel rose 4.2% year over year to $1,024 mainly due to higher spot and automotive selling prices.

Financials

AK Steel exited 2017 with cash and cash equivalents of $38 million compared with 173.2 million in 2016. The company had $807 million available under its revolving credit facility at the end of the fourth quarter.

The company’s long-term debt rose roughly 16.2% year over year to $2,110.1 million.

Cash flows from operating activities were $198.8 million for 2017 compared with $304.6 million a year ago.

Key Developments

According to AK Steel, fourth-quarter results reflected the impact of the major planned maintenance outages, which were completed as per schedule. The company is optimistic about 2018 as it anticipates robust demand in many of its key end-use markets and tap the opportunities from acquisition of Precision Partners.

The company has enhanced its production capabilities, facilities and portfolio of products as well as strengthened its capital structure. AK Steel remains focused on transforming into an innovative steel solutions provider of electrical, carbon and stainless steels products, along with a solutions provider of tooling and complex cold- and hot-stamped components and tubular products.

Price Performance

Shares of AK Steel have moved up 26.2% in the last three months, outperforming the industry’s 25.5% growth.

Zacks Rank & Stocks to Consider

AK Steel currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are ArcelorMittal (NYSE:MT) , Steel Dynamics, Inc. (NASDAQ:STLD) and Huntsman Corporation (NYSE:HUN) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ArcelorMittal has an expected long-term earnings growth rate of 13.4%. Its shares have rallied 54.5% over a year.

Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have soared 39.7% in a year’s time.

Huntsman has an expected long-term earnings growth rate of 8.3%. Its shares surged 63% over a year.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>