AK Steel Holding Corp. (AKS) Monday reported a profit for the fourth quarter, compared to a net loss in the same period last year, helped by lower costs stemming mainly from the absence of last year's accounting charge. Shipments improved during the quarter, but average selling prices declined from the previous year. Looking ahead, the company expects average selling prices to rise sequentially in the first quarter of 2010.
Fourth-quarter net income attributable to the company was $39.8 million or $0.36 per share, compared to a net loss attributable to the company of $430.6 million or $3.87 per share in the prior year.
The results of the latest quarter included a $5.1 million charge related to a state tax law change in Pennsylvania. In the previous year, results included $699.5 million in pre-tax, non-cash pension charges primarily related to the company's "corridor" accounting requirement. There were no corridor charges in 2009.
For the third quarter, the company reported net income attributable to AK Steel Holding of $6.2 million or $0.06 per share.
On average, 13 analysts polled by Thomson Reuters expected the West Chester, Ohio-based company to earn $0.20 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter dropped to $1.320 billion from last year's $1.459 billion. Analysts were expecting revenues of $1.25 billion. Net sales for the third quarter were $1.04 billion. The steel maker reported an operating profit of $87 million in the just concluded quarter, compared to an operating loss of $689.2 million in the prior year.
Total operating costs declined to $1.233 billion from $2.148 billion in the previous year due mainly to the absence of last year's pension corridor charge of $660.1 million. In the just-concluded period, AK Steel recorded an income tax provision of $35.9 million, compared to an income tax benefit of $268.3 million last year.
Shipments during the quarter increased to 1,368.3 thousand tons from 1,073.5 thousand tons in the previous year, reflecting an improved year-over-year demand for steel. Selling price per ton declined to $964 million from $1.359 billion reported last year. For full year 2009, net loss attributable to the company was $74.6 million or $0.68 per share, compared to net income attributable to the company of $4 million or $0.04 per share in the prior year. Full-year net sales plunged to $4.077 billion from $7.644 billion in the prior year. Wall Street expected the company to lose $0.85 per share for the quarter on revenues of $4.01 billion.
According to James Wainscott, chairman, president and CEO of AK Steel, "AK Steel met the severe economic crisis of 2009 head-on and emerged as a stronger company. Our quick action and relentless focus on the fundamentals in 2009 allowed us to return to operating and net profitability by the third quarter, and we expect to build upon that success in 2010."
Among peers, Nucor Corp. (NUE) is slated to announce fourth-quarter results on January 26. Analysts expect the company to earn $0.07 per share on revenues of $2.92 billion.
Looking ahead to the first quarter of 2010, AK Steel expects to report an operating profit of about $35 per ton. The company expects its first quarter 2010 shipments to approximate its fourth quarter 2009 levels, while average selling prices are expected to rise nearly 4%-5% over the previous quarter levels. The company anticipates operating and maintenance costs to reduce sequentially. In addition, AK Steel expects to incur a LIFO charge in the first quarter of 2010, as well as higher costs for raw materials.
The company said separately that its board of directors authorized the company to make a $75 million contribution to its pension trust fund. The contribution will be made during the first quarter and will meet part of the company's 2010 funding requirements. This contribution will bring AK Steel's total pension contributions since 2005 to more than $1.1 billion.
AKS closed Friday's regular trade at $20.19, down from the previous close of $21.22, on 15.75 million shares.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.