{"id":6294,"date":"2011-07-28T01:35:48","date_gmt":"2011-07-28T05:35:48","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=6294"},"modified":"2011-07-28T01:35:48","modified_gmt":"2011-07-28T05:35:48","slug":"ak-steel-suffers-poor-earnings","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2011\/07\/28\/ak-steel-suffers-poor-earnings\/","title":{"rendered":"AK Steel Suffers Largest One-Day Loss In Three Years on Poor Earnings"},"content":{"rendered":"

(This is an excerpt from an article I originally published on Seeking Alpha. Click here to read the entire piece<\/a>.)<\/strong><\/p>\n

The shorts finally nailed AK Steel (AKS) (shorts are about 17% of AKS’s float<\/a>). On July 26, AKS reported<\/a> it will be squeezed by lower steel prices and higher input costs – especially iron ore. The stock opened down 4.8% and sold off all day for a closing loss of 17.5%. The day’s carnage delivered AK Steel’s largest one-day loss since a 19.8% loss on November 20, 2008. <\/p>\n

All quotes and information in this post come from Seeking Alpha transcripts<\/a> for the earnings conference call:<\/p>\n

\n“…we expect shipments between 1.4 million and 1.45 million tons with the average selling price per ton declining about 1% from the Q2 level. We anticipate raw material costs will be up about $20 per ton quarter-over-quarter, with most of that increase attributable to iron ore…”<\/p><\/blockquote>\n

This translated into very poor guidance with profits taking a severe beating. AKS guided to $15\/ton in Q3 while profits last quarter were $46\/ton and $14\/ton in Q1. <\/p>\n

Ironically, AKS noted that Q2 was their “best quarter in quite a while” and noted that…<\/p>\n

{snip}<\/p>\n

…AKS is now at 9-month lows and at this rate could easily retest 2010 lows around $11.50 (AKS is at $12.73 at the time of writing). Earlier this month, I sold calls against my position anticipating that AKS was hitting the top end of a trading range, but I figured the bottom of that trading range would stay around $14. I will continue to hold here with the expectation that AKS is close to its worst case scenario – absent a new global recession.<\/p>\n

Be careful out there!<\/p>\n

(This is an excerpt from an article I originally published on Seeking Alpha. Click here to read the entire piece<\/a>.)<\/strong><\/p>\n

Full disclosure: long AKS<\/p>\n","protected":false},"excerpt":{"rendered":"

(This is an excerpt from an article I originally published on Seeking Alpha. Click here to read the entire piece.) The shorts finally nailed AK Steel (AKS) (shorts are about 17% of AKS’s float). On July 26, AKS reported it will be squeezed by lower steel prices and higher input costs – especially iron ore. … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[199,220,43,44],"tags":[187,188,676],"class_list":["post-6294","post","type-post","status-publish","format-standard","hentry","category-commodities","category-earnings","category-industrial-sector","category-steel","tag-ak-steel","tag-aks","tag-iron-ore"],"yoast_head":"\nAK Steel Suffers Largest One-Day Loss In Three Years on Poor Earnings - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2011\/07\/28\/ak-steel-suffers-poor-earnings\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"AK Steel Suffers Largest One-Day Loss In Three Years on Poor Earnings - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"(This is an excerpt from an article I originally published on Seeking Alpha. 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