AK Steel, Schnitzer Steel Earnings Rise Amid Lower Costs

AK Steel and Schnitzer Steel Industries Inc. both reported stronger earnings Tuesday as the companies benefited from cost-cutting measures.

Shares of AK Steel rose 8% to $5.60 and Schnitzer Steel rose 6.4% to $24.90 in early trading.

U.S. steelmakers had been hurt by low prices as the result of a glut of capacity and high levels of less expensive imports. The government's import tariffs this year also have been a factor in improved results at several big steel companies in recent quarters.

Over all, AK Steel reported a third-quarter profit of $50.9 million, or 21 cents a share, up sharply from $6.7 million, or 4 cents a share, a year earlier. Revenue decreased 15% to $1.45 billion as shipments fell 24%, partly related to the company's decision to focus less on less profitable commoditized products.

Analysts polled by Thomson Reuters expected per-share profit of 13 cents and revenue of $1.47 billion.

Total operating expenses fell 19%.

For the three-month period ended Aug. 31, Schnitzer reported a profit of $16.1 million, or 58 cents a share, up from $10.7 million, or 39 cents a share, a year earlier. Excluding items, adjusted per-share earnings from continuing operations rose to 60 cents from 31 cents.

The latest quarter included a previously disclosed insurance reimbursement linked to legal and other costs associated with an environmental matter of 21 cents a share. Excluding items, the steelmaker and metal recycler had expected adjusted per-share earnings from continuing operations of 56 cents to 60 cents.

Revenue dropped 15% to $390.7 million, above analysts' estimates for revenue of $389.8 million.

Overhead costs declined 20%.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

October 25, 2016 10:25 ET (14:25 GMT)

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