- AK Steel (AKS -13.2%) plunges to its lowest level in more than a month, despite initial gains after reporting a smaller than expected Q4 loss, amid investor concerns that rising costs will constrain margins even as prices gain.
- AK Steel said in today's earnings conference call that it sees higher prices mitigating rising costs in 2018, guidance that Credit Suisse (SIX:CSGN) analyst Curt Woodworth says caused investors to be “pretty perplexed.”
- “You’re getting pricing to cover costs, but that doesn’t mean you’re making a lot more money,” Woodworth tells Bloomberg. AKS "said they would cover raw material costs, but the point is you’re kind of running to stand still."
- Woodworth says the “rubber meets the road” in Q2 because that’s when AKS will monetize spot business and get the bulk of remaining contracts booked.
- Other steel producers also are sharply lower: X -5.7%, WOR -3.5%, NUE -3.3%, CMC -2.4%, MT -1.8%, STLD -1.1%.
- Source: Bloomberg First Word
- Now read: U.S. Steel: Buy Into Strength
Original article