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December 22, 2011
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Recently, AK Steel Holding Corporation (AKS) reached a three-year labor agreement with Walbridge workers at its AK Tube facility in Walbridge, located near Toledo.
The company announced that members of United Steelworkers of America Local 1915 approved a new contract that encompasses approximately 100 hourly production and maintenance employees.
The agreement will be effective following the expiration of the existing contract on January 22, 2012.
AK Steel posted a net loss of $3.5 million or 3 cents per share in the third quarter of 2011 compared with a net loss of $59.2 million or 54 cents during the year-ago quarter. However, quarterly results came in below the Zacks Consensus Estimate of break-even.
Net sales, as reported by the company, were $1,585.8 million on shipments of 1,368,800 tons versus sales of $1,575.9 million on 1,465,800 tons in the prior-year quarter. Net sales also missed the Zacks Consensus Estimate of $1,662 million.
The company’s debt-to-capitalization ratio stood at 50.8% as of September 2011 versus 50.2% as of December 31, 2010.
AK Steel is uniquely positioned to focus on products with high margins. Electrical steel continues to be the company’s strongest product line, with demand recovering both in the U.S. and abroad, although at a slower rate. AK Steel is operating its plants at above 80% capacity and is well positioned to serve the end markets when the demand rebounds.
However, higher input costs, particularly iron ore, are eroding the margins of the company. Iron ore pricing concerns have led to a negative outlook for steel manufacturers. A K Steel currently retains a Zacks #3 Rank (short-term Hold rating).
AK Tube LLC, a wholly-owned subsidiary of AK Steel, employs about 300 people at plants in Walbridge and Columbus, Ind. It produces carbon and stainless electric resistance welded tubular steel products for truck, automotive and other markets.
The company competes with Nucor Corporation (NUE) and Steel Dynamics Inc. (STLD).
Read the full analyst report on "AKS"
Read the full analyst report on "STLD"
Read the full analyst report on "NUE"
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