AK Steel

So far in this series, we’ve discussed Nucor (NUE), Steel Dynamics (STLD), and U.S. Steel Corporation’s (X) third-quarter earnings guidance. In this part, we’ll see how things look for AK Steel (AKS) in the third quarter and beyond. AK Steel has underperformed the broader steel space (XME) in 2018. The stock saw a selling spree after its first and second-quarter earnings release. In the second quarter, AK Steel missed the consensus estimates and its third-quarter guidance also spooked the markets. Let’s see what analysts project for the company’s third-quarter earnings.

AK Steel: Could Things Turn Around in the Fourth Quarter?

Earnings estimates

Analysts polled by Thomson Reuters expect AK Steel to post revenues of $1.81 billion in the third quarter. The company posted revenues of $1.75 billion in the second quarter and $1.49 billion in the third quarter of 2017. AK Steel’s adjusted EBITDA is expected to increase to $173 million in the third quarter—compared to $148 million in the second quarter and $69 million in the third quarter of 2017.

Guidance

AK Steel provides a qualitative earnings guidance during its earnings calls. During the company’s second-quarter earnings call, Jaime Vasquez, AK Steel’s CFO, said, “We estimate that our third quarter flat-rolled steel shipments will increase about 5% from the second quarter due to higher shipments into the distributor and converter market and the infrastructure and manufacturing market.” AK Steel also expects its “third quarter adjusted EBITDA margin to improve by at least 50 basis points from the second quarter.”

Notably, AK Steel’s earnings have lagged other steelmakers this year. However, the company’s shipments should reflect higher steel prices from the fourth quarter, which we’ll discuss in the next part.

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