It was good news bad news for the steel industry Tuesday. AK Steel Holding Corp. (NYSE: AKS) and United States Steel Corp. (NYSE: X) both reported better-than-expected third-quarter results. But for U.S. Steel, it was the third straight quarterly loss as the economic downturn continued to drag down demand.
For the three months that ended in September, U.S. Steel said it lost $303 million, or $2.11 per share. That compares with a profit of $919 million, or $7.79 per share, in the same period of last year. Revenue for the quarter fell 61% to $2.82 billion. Analysts surveyed by Thomson Reuters had expected a loss of $2.87 per share on revenue of $2.72 billion.
Although prices and production did rise during the third quarter as distributors scrambled to fill orders after depleting their stockpiles, the market for steel remained weak. The company said it remains cautious about its outlook, but believes that the U.S. and global economies are in the early stages of a recovery.
AK Steel, on the other hand, ended a string of losses and reported a profit for the quarter that totaled $6.2 million, or $0.06 per share. That compares with $1.67 per-share earnings a year ago, and a $0.43 per-share net loss in the previous quarter. Net sales for the third quarter came to $1.04 billion. Analysts had expected a penny per share profit and revenue of $1.03 billion.
AK Steel also said it expects a 24% increase in shipments for the fourth quarter but for the average per-ton selling price to decline about 2%. It also expects to incur a charge of approximately $5.0 million due to a decrease in the value of the company's deferred tax assets as the result of tax law changes.
Shares of AK Steel and U.S. Steel both fell about 8% Tuesday, to $17.17 and $37.42, respectively. While AKS is up 84% year to date, U.S. Steel shares are trading at about the same as at the beginning of the year.
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