AK Steel – AKS – Reports Financial Results for Second Quarter of 2012
AK Steel (NYSE: AKS) reported a net loss of $724.2 million, or $6.55 per diluted share of common stock, for the second quarter of 2012. The 2012 second quarter results include the effects of a non-cash charge of $736.0 million, or $6.65 per diluted share, for a valuation allowance for the company’s deferred tax assets. As discussed more fully below, a tax valuation allowance is required under accounting principles to record the effect on income tax expense of a change in the potential future realization of the company’s deferred tax assets. This accounting treatment is subject to reversal upon a return by the company to sustained profitability.
Excluding the effects of this charge, AKS’s adjusted net income for the second quarter of 2012 was $11.4 million, or $0.10 per diluted share. These results reflect an improvement over the net loss of $11.8 million, or $0.11 per diluted share, incurred in the first quarter of 2012. They compare to net income of $33.1 million, or $0.30 per diluted share, for the second quarter of 2011.
AKS Net sales for the second quarter of 2012 were $1,538.4 million on shipments of 1,335,800 tons, compared to sales of $1,791.9 million on shipments of 1,497,000 tons for the year-ago second quarter and sales of $1,508.7 million on shipments of 1,325,900 tons for the first quarter of 2012.
AKS said its average selling price for the second quarter of 2012 was $1,152 per ton, a 1% increase over the first quarter of 2012, and about 3% lower than the second quarter of 2011. The higher average selling price for the second quarter 2012 over the first quarter of 2012 was primarily due to a richer product mix and increased contract sales, partially offset by lower selling prices for spot market sales.
The company reported an operating profit for the second quarter of 2012 of $56.7 million, or $42 per ton, compared to $68.5 million, or $46 per ton, for the second quarter of 2011 and $4.1 million, or $3 per ton, for the first quarter of 2012. The 2012 second quarter operating results reflect an improvement of $52.6 million compared to the first quarter of 2012. The 2012 second quarter results include a LIFO credit of $18.3 million, compared to a LIFO charge of $38.8 million in the second quarter of 2011 and a LIFO credit of $12.4 million for the first quarter of 2012.
The company ended the second quarter of 2012 with $37.4 million of cash and cash equivalents and $671.7 million of availability under the company’s revolving credit facility, for total liquidity of approximately $709 million.
AK Steel – AKS
AK Steel (AKS) produces flat-rolled carbon, stainless and electrical steels, primarily for automotive, infrastructure and manufacturing, construction and electrical power generation and distribution markets. The company employs about 6,200 men and women in Middletown, Mansfield, Coshocton and Zanesville, Ohio; Butler, Pennsylvania; Ashland, Kentucky; Rockport, Indiana; and its corporate headquarters in West Chester, Ohio.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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