AK Steel reported that fourth quarter income before income taxes of $65.1 million, compared to an income before income taxes of $73.7 million for the fourth quarter of 2004. Without the adjustments, the company recorded a net loss of $41.5 million for the quarter, compared to a net loss of $102.8 million for the same time the previous year.
Net sales for the quarter were $1.377 billion on shipments of 1.6 million tons. The company said that its average steel selling price for the quarter was $860 per ton, and its adjusted operating profit for the quarter was $83.5 million, compared to adjusted operating profit of $98.7 million for the prior year’s quarter.
For the year, AK Steel had adjusted income before income taxes of $170.7 million, compared to 2004’s figure of $146.2 million, which excludes fourth quarter charges. Including charges, AK Steel reported a net loss $2.3 million for the year, compared to net income of $238.4 million for 2004.
Net sales for the year were $5.647 billion on record shipments of 6,418,200 tons, compared to net sales in 2004 of $5.217 billion, on shipments of 6,252,600 tons. The company said its average steel selling price in 2005 rose to $879 per ton, compared to its 2004 average of $833 per ton, and that its adjusted operating profit for 2005 was $245.8 million, equal to $38 per ton, compared to 2004 adjusted operating profit of $251.1 million, or $40 per ton. Including the charges, 2005 operating profit was $113.1 million, or $18 per ton, compared to an operating loss of $79.7 million, or $13 per ton in 2004.
"AK Steel achieved outstanding operating and sales performances in 2005," said James Wainscott, chairman, president and CEO. "In every core operating metric -- safety, quality and productivity, we achieved record performances, and we surpassed our aggressive controllable cost targets. However, the continued volatility in energy, raw materials and spot market pricing underscores AK Steel's need to further lower its operating costs to achieve sustained profitability," he said.
"We are rebalancing our operations and making prudent capital investments to take advantage of changes in our markets," Wainscott said. "Electrical steel demand is strong and growing stronger throughout the world, and we are planning to make targeted capital investments to increase our electrical steel capacity to meet increased customer requirements. We will also invest in large diameter stainless tube-making equipment to help AK Tube meet market demand for more efficient large diesel exhaust components required by more stringent environmental regulations," he said.
AK Steel said it expects shipments between 1,575,000 and 1,600,000 tons in the first quarter of 2006, with an average selling price per ton 4% to 5% higher than in the fourth quarter of 2005, with raw material costs higher and natural gas costs similar to fourth quarter 2005 levels. The company said it expects to generate operating profit in the first quarter of 2006 between $33 and $37 per shipped ton.