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AK Steel’s Q2 2018 Earnings: A Reality Check

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Aug. 1 2018, Published 3:35 p.m. ET

AK Steel

AK Steel (AKS) released its second-quarter earnings on July 30 after the markets closed, and the company held its earnings call on July 31. The stock saw a selling spree and closed with a loss of 13.6% on July 31. Other US steel producers (XME) also closed in the red.

Nucor (NUE) saw price action of -0.42%, and Steel Dynamics (STLD) fell 1.0%. U.S. Steel Corporation (X), which is scheduled to release its second-quarter earnings on August 1 after the markets close, also fell ~1.0%.

This marks the fourth consecutive quarter in which AK Steel has seen selling pressure after its earnings release. With yesterday’s loss, AK Steel pared most of its July gains. Notably, the stock was outperforming the broader steel space in July before its earnings release.

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Series overview

Although AK Steel’s revenues were largely in line with its estimates, it missed its consensus estimates on the bottom line. To exacerbate the situation, the company’s second-quarter earnings fell year-over-year despite the sharp rise in steel prices this year. Among its peers, Nucor’s second-quarter earnings more than doubled year-over-year, and the company had its best second quarter ever.

After the slide in AK Steel’s stock price, the key questions are whether its earnings were really all that bad and where the stock can go from here. We’ll discuss these two aspects in detail in this series. Let’s begin by looking at AK Steel’s second-quarter performance in the next article.

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