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AK Steel projects larger-than-expected 2Q loss

WEST CHESTER, Ohio (AP) -- AK Steel will likely post a larger-than-expected second-quarter loss, the company said Monday, citing the effects of a maintenance outage at one of its blast furnaces, on top of greater tax expenses.

Losses for the quarter are expected to be between 33 cents and 38 cents per share, according to the company. That is far worse than the 12 cent loss Wall Street had been expecting, according to FactSet.

The West Chester, Ohio, steelmaker plans to shut down its Middletown blast furnace for seven days for planned maintenance.

Overall maintenance outage costs, including Middletown, are expected to total about $21 million for the quarter, up from $1 million in the first quarter of this year, the company said.

AK Steel also expects to record non-cash income tax expenses of about $11 million, or 8 cents per share, for the second quarter. That compares with an income tax benefit of $2.8 million, or 2 cents per share, in the second quarter.

As a result, the company said it expects its tax expense to be about $14 million, or 10 cents per share, higher in the second quarter compared with the first quarter.

AK Steel also said Monday that it expects its second-quarter shipments to total between 1.3 million and 1.4 million tons, which would represent an increase of about 4 percent to 5 percent over first-quarter levels, helped by higher demand from the automotive and carbon spot markets.

But the company said it expects its average selling price per-ton for the quarter to edge down about 1 percent from first-quarter levels to about $1,055 per ton, mainly as a result of lower spot market prices for carbon steel products. 

Despite that decrease, AK Steel said that pricing has been more favorable in recent weeks, noting that it recently announced price increases for carbon flat-rolled steel products, which has boosted its spot market selling prices.

Shares of AK Steel Holding Corp. fell 3 cents to $3.54 in morning trading.