Quarterly earnings reported by corporations tend to be a bit on the boring side and may represent only short-term revenue gains or losses. However, the fourth quarter earnings reported Monday by AK Steel Holding Corp. certainly are an encouraging indication that the worst days of the recession have ended and things are looking up for one of this community’s largest employers.
The steelmaker reported a modest profit during the final three months of 2009 as opposed to huge losses during the same period in 2008. For the record, AK Steel earned $39.8 million, or 36 cents per share, in the last quarter of 2009, in contrast to a loss of $430 million, or $3.87 per share, in the same quarter of 2008.
The company reported a 28 percent increase in shipments as the market for steel, which was heavily impacted by downturns in automobile and appliance manufacturing and construction brought on by the worst economic recession since the Great Depression, continued to show improvement.
“AK Steel met the severe economic crisis of 2009 head-on and emerged as a stronger company,” said James L. Wainscott, the company’s president and CEO. Such boastful talk by company executives is to be expected, but in this case, we hope Wainscott is right.
AK Steel reported that sales actually dropped 9 percent during the quarter to $1.32 billion from $1.46 billion a year ago, but that the company actually shipped 300,000 tons more product during the quarter than during the same period of 2008. The lower sales reflected lower selling prices during the 2009 fourth quarter, but the turnaround in earnings is an indication that the company made the right adjustments to changes in the economy.
No one is pretending that the economic blahs are over for the steel industry, but a small profit for AK Steel is a whole lot better news for the economic life of this community than another huge loss.
