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AK Steel Missed the Shipment Guidance Again

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Shipment

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Lower revenues

AK Steel posted revenues of $1.67 billion in the fourth quarter—lower than expected. The company posted revenues of $1.73 billion in the third quarter and $1.49 billion in the fourth quarter of 2017. During the third-quarter earnings call, AK Steel said that it expects “fourth quarter flat rolled steel shipments to be essentially flat compared to the third quarter.” The company saw a sequential fall of 2%–3% in its fourth-quarter average selling prices due to less automotive shipments.

Looking at AK Steel’s fourth-quarter financial performance, its flat-rolled shipments fell 2.5% sequentially. AK Steel missed its shipment guidance in the third quarter due to fewer automotive shipments. AK Steel attributed fewer automotive shipments to inventory adjustments by automakers. Steel Dynamics (STLD) also missed its revenue estimates in the fourth quarter. While Nucor’s (NUE) fourth-quarter revenues are expected to fall sequentially, U.S. Steel Corporation (X) is expected to report slightly higher revenues.

Average selling prices

AK Steel’s ASP (average selling price) was better than expected in the fourth quarter. The company reported a flat-rolled ASP of $1,106 per ton in the fourth quarter—compared to $1,114 per ton in the third quarter.

AK Steel’s 2019 guidance didn’t look impressive, which we’ll discuss in the next part.

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