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What: Shares of steel product maker AK Steel Holding Corporation (NYSE:AKS) jumped as much as 19% today after updating fourth quarter guidance.
So what: Today, management said it expects fourth quarter 2013 shipments to be around 1.4 million tons and expects earnings per share of between $0.02 and $0.06 after adjusting for one-time items. That would be a 13% increase in shipments and an improvement from an adjusted $0.12 per share loss last quarter.
Now what: AK Steel is recovering from an outage at its Middletown Works blast furnace, which will account for some of the improvement in Q4, but the steel market is also beginning to improve. The company is seeing more demand in the spot market this quarter, although overall selling prices will be about a 4% drag on revenue because the third quarter had a higher percentage of sales in the spot market. I'm leery of a company that's consistently posted losses over the past few years, but keep an eye out for continued strength into 2014 as the economy improves, which could help make AK Steel's better fourth quarter a long-term trend.
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