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AK Steel (AKS) Reaches New Labor Deal at Middletown Facility

Zacks

AK Steel Holding Corporation AKS reached a two-year labor agreement with the members of the International Association of Machinists and Aerospace Workers (“IAM”) Local 1943. The deal, covering roughly 1,730 hourly employees at the company’s Middletown, OH facility will be effective until Mar 15, 2020.

The contract was ratified via voting on Mar 12 and the company is said to have reached the agreement ahead of the expiration date. This competitive labor contract will serve the interests of the employees and the company.

AK Steel has underperformed the industry it belongs to over the past six months. The company's shares have declined 6.7% against the industry’s gain of about 22.4%.

The company is optimistic about 2018, as it anticipates robust demand in many of its key end-use markets and hopes to tap the opportunities from the Precision Partners’ acquisition.

The company enhanced production capabilities, facilities and portfolio of products as well as strengthened capital structure. AK Steel remains focused on evolving into an innovative steel solutions provider of electrical, carbon and stainless steels products, along with a solutions provider of tooling and complex cold- and hot-stamped components and tubular products.

However, AK Steel faces weakness in electrical steel pricing due to global overcapacity. It is also exposed to a volatile raw material pricing environment. The U.S. steel industry is also not out of the woods yet.


AK Steel Holding Corporation Price and Consensus

Zacks Rank & Stocks to Consider

AK Steel has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic material space are LyondellBasell Industries N.V. LYB, The Chemours Company CC and Kronos Worldwide Inc. KRO, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

LyondellBasell has an expected long-term earnings growth rate of 9%. The company’s shares have moved up 21.4% in a year.

Chemours has an expected long-term earnings growth rate of 15.5%. The company’s shares have moved up 42.1% in a year.

Kronos has an expected long-term earnings growth rate of 5%. Its shares have gained 54.8% over a year.

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