The steel producer posted revenue of $1.45 billion in the period, which missed Wall Street forecasts. Four analysts surveyed by investment research firm Zacks expected $1.48 billion.
Profitability decline was attributable “primarily to the General Motors strike, and higher costs for iron ore, coal and coke during the current year fourth quarter,” according to the company.
“Those challenges more than offset lower costs for scrap and energy,” the company said.
Revenues declined 14 percent on a year-to-year basis to $1.4 billion.
As a result of the pending acquisition by Cleveland-Cliffs Inc., AK Steel did not holding an earnings conference call for the fourth quarter.
The company “operated well in the face of very challenging market conditions during the fourth quarter,” Roger Newport, AK Steel’s CEO, said in a statement.
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The biggest move the company made during the fourth quarter was to enter into the agreement with Cleveland-Cliffs Inc.
“We continue to be excited about the value-creation potential of the transaction, which we anticipate will close on March 13, subject to regulatory review and shareholder approval,” Newport said.
In October, AK Steel completed a major planned maintenance outage at its Dearborn Works and made “significant investments” in the blast furnace and steelmaking operations, which will cause savings later, the company said.
Also last quarter, the company completed the transition of all products from its Ashland Works coating line and closed that facility in Kentucky, as planned.
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For the year, AK Steel reported profit of $11.2 million, compared to net income of $186 million for 2018. Revenue was reported as $6.36 billion.
The company said revenue decline for the year was primarily driven by significantly lower steel spot market selling prices, lower shipments to the automotive and distributor and converter markets, and higher costs for iron ore, coal and coke during 2019.
Those factors more than offset higher automotive market selling prices, lower costs for outages, energy and certain raw materials, including scrap and alloys, and higher unrealized gains on iron ore derivatives compared to a year ago, AK Steel said.
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One of the Cincinnati-Dayton region’s largest publicly-held companies, AK Steel produces flat-rolled carbon, electrical and stainless steels used by the automotive, appliance, construction and manufacturing markets.
The company has approximately 9,300 employees at manufacturing operations in the United States, Canada and Mexico, and facilities in Western Europe. It employs approximately 2,500 full-time workers in Butler County between headquarter operations, the Middletown Works steel plant and the AK Steel Research and Inovation Center.
The Associated Press contributed to this report
BY THE NUMBERS: AK Steel’s fourth quarter
$1.45 billion: Revenue
14: percentage of revenue decline (4Q 2018 to 4Q 2019)
$33.5 million: fourth-quarter gain in profits for 4Q 2018
$53.9 million: fourth-quarter loss in profits for 4Q 2019
$86.5 million: Operating profit at the end of fourth quarter 2018
$10.4 million: Operating profit for the end of fourth quarter 2019
$14.9 million: Planned outage costs in the fourth quarter of 2018
$34.4 million: Planned outage costs in the fourth quarter of 2019
Source: AK Steel
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