NEW YORK (AP) -- AK Steel slumped 8 percent in Friday trading after it warned falling prices would lead to a larger-than-expected loss this quarter.
THE SPARK: The steelmaker said late Thursday that it expects to take a loss of 22 to 27 cents per share due to lower steel prices. It also cited reduced shipments because of an outage at one of its blast furnaces.
THE BIG PICTURE: A blast furnace at the company's Middletown, Ohio facility experienced a mechanical failure on June 22. It was restarted July 12. AK Steel said that it expects to recover about $14 million from insurance.
The company said it now expects to ship 1.2 million to 1.3 million tons of steel during the quarter, down from 1.4 million tons a year ago. The company expects an average shipping price of $1,065 per ton, compared with $1,073 per ton in the same period a year ago.
THE ANALYSIS: KeyBanc analyst Mark Parr said that he expects a pullback in carbon steel pricing following the recent run-up. He kept his "Hold" rating on AK Steel's stock.
Citi Brian Yu reiterated his "Sell" rating, citing the company's third-quarter guidance.
SHARE ACTION: AK Steel Holding Corp. fell 37 cents, or 8.3 percent, to $4.07 in morning trading. The shares have traded between $2.76 and $5.90 over the past 52 weeks.
Shares are down nearly 12 percent since the beginning of the year.