AK Steel Holding Corp. (NYSE: AKS) released its second-quarter financial results before the markets opened on Tuesday. Out of all the stocks that reported Tuesday morning, it seems that AK Steel may be the biggest winner of the group.
The steel giant noted that it had $0.19 in earnings per share (EPS) and $1.56 billion in revenue. The same period from last year reportedly had $0.08 in EPS and revenue of $1.49 billion. Thomson Reuters had consensus estimates of $0.12 in EPS and $1.55 billion in revenue for the quarter.
Second-quarter shipments declined 6% to 1,465,200 tons compared to last year, primarily as a result of a decrease in automotive demand. However, the average selling price per ton increased 11% to $1,058 from $957 in this time, primarily as a result of a higher average selling price on both contract and spot market sales and higher surcharges on specialty steel products.
The increase in net sales, along with the firm’s continued focus on cost management, helped contribute to the 43% increase in adjusted EBITDA to $142.0 million for this quarter.
During this quarter, AK Steel signed an agreement to acquire Precision Partners for $360 million in cash. Precision Partners is a leading North American automotive market company that provides engineering, tooling, die design and hot and cold stamped steel components.
AK Steel’s cash and cash equivalents totaled $136.3 million at the end of the quarter, down from $173.2 million at the end of the previous fiscal year.
Roger K. Newport, CEO of AK Steel, commented:
Our second quarter performance highlights the continued benefits achieved through the strategic initiatives implemented during the past year and a half. We are executing on the strategy that we laid out in early 2016 as further evidenced by our pending acquisition of Precision Partners. This step strengthens our position as a provider of value-added materials and design solutions.
Shares of AK Steel were last seen trading up 7% at $6.45 on Tuesday, with a consensus analyst price target of $8.64 and a 52-week range of $3.87 to $11.39.
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