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AK Steel’s 4Q17 Guidance Compared to Analysts’ Estimates

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4Q17 guidance

Previously, we discussed Nucor (NUE) and Steel Dynamics’ (STLD) 4Q17 guidance. In this part, we’ll look at AK Steel’s 4Q17 guidance compared to analysts’ estimates. The guidance was provided by the company during its 3Q17 earnings call.

Qualitative guidance

AK Steel (AKS) expects its 4Q17 shipments to fall compared to 3Q17. The company also expects its 4Q17 flat-rolled average selling prices to be slightly lower compared to the sequential quarter. It expects a sharp increase in its 4Q17 planned maintenance cost to $50 million—up from $8.5 million in 3Q17. Although AK Steel didn’t provide any watertight EBITDA (earnings before interest, tax, depreciation, and amortization) guidance, looking at its qualitative guidance, it would be fair to assume that we could see the company’s 4Q17 earnings fall more on a sequential basis.

Earnings estimates

Looking at consensus earnings estimates, analysts polled by Thomson Reuters expect AK Steel to post revenues of $1.44 billion in 4Q17. The company posted revenues of $1.49 billion in 3Q17 and $1.42 billion in 4Q16. We should remember that there could be some seasonality in AK Steel’s 4Q17 shipments on fewer automotive shipments (MT).

AK Steel is expected to post an adjusted EBITDA of $48 million in 4Q17. The company posted an adjusted EBITDA of $69 million in 3Q17 and $151 million in 4Q16. AK Steel’s earnings are expected to fall sharply in 4Q17. However, we could see the company’s earnings rise in 1H18. Read After a Tough 2017, What Lies ahead for AK Steel in 2018? to explore what could drive AK Steel’s 2018 performance.

In the next part, we’ll see what analysts project for U.S. Steel Corporation’s (X) 4Q17 earnings.

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