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AK Steel (AKS) Unit Inks Labor Deal With United Steel Workers

Zacks Equity Research
Updated

AK Steel Holding Corporation’s AKS fully-owned subsidiary, AK Tube LLC has reached a three-year labor agreement with members of United Steel Workers (‘’USW’’) Local 1915. The deal covers 100-hourly production employees at the company's facility in Walbridge, OH. 

 

The agreement will be effective from Jan 22, 2018 till Jan 22, 2021. The agreement provides a competitive labor contract that advances the interest of the company and its workforce.

 

AK Steel has underperformed the industry it belongs to over the past six months. The company's shares have lost 24.7% during the period as against the industry’s about 12.2% gain.

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AK Steel missed earnings and sales estimates in third-quarter 2017. The company reported adjusted earnings of 2 cents per share for the quarter, missing the Zacks Consensus Estimate of 3 cents.  

 

The company recorded net sales of $1,494.3 million for the quarter, up 2.8% from the year-ago quarter. However, sales missed the Zacks Consensus Estimate of $1,504 million.

 

AK Steel is exposed to raw material pricing pressure. Electrical steel prices also remain under pressure in overseas markets due to global overcapacity. Moreover, the U.S. market is still seeing high levels of imports of steel products. Some additional headwinds are expected to come from spending associated with planned maintenance outages.

 

AK Steel Holding Corporation Price and Consensus

 

AK Steel Holding Corporation Price and Consensus | AK Steel Holding Corporation Quote

 

Zacks Rank & Stocks to Consider

AK Steel currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Ingevity Corporation NGVT,  Westlake Chemical Corporation WLK and POSCO PKX.

Ingevity has expected long-term earnings growth of 12% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

 

Westlake Chemical has expected long-term earnings growth of 8.4% and flaunts a Zacks Rank #1.

 

POSCO has expected long-term earnings growth of 5% and carries a Zacks Rank #2 (Buy).

 

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