It would have been a little bit better for AK Steel Holding Corporation (NYSE:AKS) in 1Q2015 had it not been for the impact of write-down in the quarter. The company also blamed pressure from imports for its 1Q woes that saw loss widening compared to the same quarter a year earlier. However, given the strong demand for steel in the automotive sector, the company managed to post significant uptick in sales.
Shipments up 39%
Investment in Magnetation LLC, a joint venture focused on iron-ore pellets, dragged down the performance of AK Steel Holding Corporation (NYSE:AKS) in 1Q, leading the company to report a larger than expected loss. The company disclosed that its shipments in 1Q rose 39% thanks to strong demand and a boost from an asset it acquired. Demand was particularly strong in the automotive sector.
Sales in the automotive sector have been impressive, AK Steel Holding Corporation (NYSE:AKS) had earlier cautioned that imports could pose challenge in the market. However, it stage successful battle to increase shipments in the quarter.
Impacts on performance
While write-down caused the major impact on results in the latest quarter, AK Steel Holding Corporation (NYSE:AKS) also reported an adverse impact a year due to server winter. The harsh weather condition caused power outages and also raised the cost of energy thereby denting earnings.
1Q earnings numbers
AK Steel Holding Corporation (NYSE:AKS) managed to increase its sales by 27% to $1.75 billion in 1Q, beating the consensus estimate of $1.74 billion. However, EPS deteriorated compared to a year ago as the company posted a loss of $1.72 per share compared to a loss of $0.63 per share a year earlier. On an adjusted basis, the loss per share was $0.28.
In addition to pressure from imports, AK Steel Holding Corporation (NYSE:AKS) also cited that its selling price in the quarter fell by nearly 9%, contributing to the overall adverse impact in the quarter.