After posting a terrible first-quarter outlook, AK Steel Holding Corporation (NYSE:AKS) had a bad day as its shares fell heavily throughout the trading session. The steel maker said that despite decent demand in steel, its margins were crushed by imports. Also, due to price volatility, the buyers are on the sidelines and hence shipments could remain impacted, the company said.
AK Steel Holding Corporation (NYSE:AKS) guided its first-quarter results lower and said that it is expecting a net loss in the range of $0.23-$0.28 per share, which is widely higher than the street’s estimate of $0.01 loss per share. The company said that its steel shipments turned lower-than-expected during the first quarter, and it believes that unfair traded imports will remain a threat to its first quarter operations. Resultantly, AK Steel Holding Corporation (NYSE:AKS) anticipate first quarter shipments to fall to 1.73 million tons, which represents 14% quarter-over-quarter decline.
Story could reverse
Meanwhile, amid the sluggish growth projected by AK Steel Holding Corporation (NYSE:AKS), analysts from Credit Suisse believes that the situation may overturn in the June quarter. They said that the US steel industry could change in two ways; one being that at least one new Trade Case will be lodged in the coming months. Secondly, the research firm feels that the decent demand and harmful import pricing could reverse.
The firm suggested that the cautious data points indicate that the residential construction will embrace more steel-intensive construction. Also, it said that the pricing spread in between the US and International Steel is closing in, leaving less incentive for imports. Hence, Credit Suisse is quite positive on AK Steel Holding Corporation (NYSE:AKS) along with other steel players but said that their view is for 1-3 year period.
However, Credit Suisse’s comments failed to rescue AK Steel Holding Corporation (NYSE:AKS), which fell by nearly 4% to $4.05 on Friday.