AK Steel Holding Corp. (NYSE: AKS) Earnings Signal Turnaround Continues

383

By Stefan Larson on November 5, 2014 Company

On Tuesday, AK Steel Holding Corp. (NYSE: AKS) announced its results for the third-quarter of 2014 prior to the market opening. The company showed revenue of $1.59 billion and EPS of -$0.05. Thomson Reuters (NYSE:TRI) had consensus estimation showing revenue of $1.49 billion and an EPS of $0.09. At approximately the same time last year, AK Steel Holding Corp. (NYSE: AKS) reported revenue of $1.33 billion and an EPS of -$0.23. The thing that will probably stand out for AK Steel in terms of investors is that it closed this quarter with $912 million in liquidity

Though AK Steel Holding Corp. (NYSE: AKS) has not yet given any forecast for its fourth quarter of 2014, it would communicate prior to the guidance that its last quarter results will probably be influenced and shaped by a strategic outage at its blast furnace Ashland Works 28 days roughly. The consensus estimations for the last quarter of 2014 show revenue of $1.73 billion and EPS of $0.10.

AK Steel’s gross loss in its third quarter of 2014 was reported at $7.2 million. The same quarter last year showed a gross loss of $31.7.

In this year’s third quarter, 1.46 million tons were shipped by AK Steel Holding Corp. (NYSE: AKS) for an amount of $1.59 billion as opposed to 1.24 million tons with net sales of $1.33. This indicates that the average selling price is $1,089 per ton, up from 2% from last year during the same period.

AK Steel Holding Corp. (NYSE: AKS) acquired Dearborn in September this year. It is estimated that this acquirement will boost the scale of AK Steel’s capability to serve its many customers in a more organized and focussed way. Some of the other benefits that would come out of this acquisition are added operational flexibility along with more state-of-the-art and updated steelmaking facilities and equipment.

In a statement, by CEO, President and Chairman of AK Steel’s James L talked about how the financial performance of this year’s third quarter surpassed the company’s expectations. Wainscott believes its ongoing tradition of recording adjusted gross income enables it to have a strong foundation for cash flow and earnings growth in the coming future.

According to the calls of recent analysts;

On October 17, AK Steel Holding Corp. (NYSE: AKS) was upgraded by Nomura from Neutral from Hold to a Buy and increased its price target of $7.50 to $10.
On October 2, AK Steel Holding Corp. (NYSE: AKS) was upgraded by Deutsche Bank to a Buy and increased the price target of $7.25 to $10.
In June, even Merrill Lynch noticed that the turnaround was improving.

An 11:20am price update shows that, after the market opened, AK Steel’s shares were a little lower, but its share prices lowered to $6.65, down 10%, during trading later in into the morning.

On Monday, AK Steel’s shares closed at $7.43, down from 1.8%. After the earnings report was published, the preliminary premarket reaction was good and shares increased 2.5% at $7.62. The stock for of AK Steel Holding Corp. (NYSE: AKS) has an estimated $9.72 price target by analysts along with a trading range over 52 weeks between $4.36 and $11.37. It must be remembered that AK Steel Holding Corp. (NYSE: AKS) had a $20 stock when 2010 started and a $15 stock during the first half of 2011.