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Mills pick up the pace: Carbon steel and aluminum outpaced stainless in the second quarter. Following is a roundup of leading mills' latest conference calls with analysts and investors.

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AK Steel

Sets New Records Across the Board

A more-diversified AK Steel reported record sales, income, tons shipped and average selling price during the second quarter.

AK Steel reported net sales of $2.24 billion during the quarter, 19.7 percent better than the same period in 2007. Shipments totaled 1.74 million tons, 1.7 percent ahead of the 1.71 million tons from the same period in 2007.

The company's income for the quarter was $145.2 million, 32.1 percent better than the second quarter of the previous year. The average selling price was $1,287 per ton, a 13 percent jump from the first quarter and 18 percent better than the second-quarter of 2007.

"Despite unprecedented raw material and energy cost increases and weakness in several markets, AK Steel employees have shown they can deliver record operating and financial performances," James L. Wainscott, president and CEO, told investors and analysts during the company's quarterly conference call."

The West Chester, Ohio-based steelmaker has had to make considerable adjustments to its product mix in light of depressed sales in some of its traditional markets. Auto sales, which represented 40 percent of 2007 sales, were down to 29 percent of quarterly revenue. The appliance market has also dipped in the wake of the residential housing slump.

"As markets have changed, so has AK Steel. We've adapted pretty well," Wainscott said. "We have increased sales to the spot market and substantially increased our export sales. Not all of our eggs are in one basket."

Additionally, Wainscott said, the steel industry has had to deal with unprecedented spikes in the costs for raw materials. Those increases have forced AK Steel to adjust its agreements with customers. "AK began negotiating variable pricing mechanisms of one sort or another into its contract sales agreements. Today, the vast majority of agreements contain variable components allowing for adjustments," Wainscott said. Those contracts that don't already contain those agreements are up for renewal in the next 12 months, and will be adjusted accordingly, he said.

"Our position is that the days of pure fixed price sales agreements for steel products are history," Wainscott said. "In the future, AK cannot and will not bear all the risk for price movements."

AK Steel officials expect third-quarter shipments to be approximately 1,550,000 tons, off from the second-quarter figures due to expected seasonally lower automotive shipments and a planned five-day outage at the company's Middletown Works hot-strip mill. The company also expects higher raw material and energy costs relative to the second quarter.

AK Steel also anticipates its third-quarter 2008 average per-ton selling prices will be about 10 percent higher compared to the second quarter of 2008, while it expects to generate operating profit of $170 to $175 per ton, which would represent another record.

The outage at the hot-strip mill will take an estimated 100,000 tons of hot-band out of the system from third-quarter shipments. "We should be well positioned as we head into the fourth quarter and continue to wait for any positive sentiment coming out of the automakers, and for the housing markets to really ramp things back up," Wainscott said.

Alcoa

Higher Volume, Pricing Offset Input Cost Pressures

Alcoa reports that strong revenue growth in second-quarter 2008 led to an 80 percent increase in profitability compared with the first quarter of this year. The Pittsburgh-based company reported net income of $546 million, compared with $303 million in first-quarter 2008.

Revenues for the quarter increased to $7.6 billion from $7.4 billion in the first quarter of 2008 driven by higher volumes and prices. All of the company's operating segments achieved higher revenues in the quarter. Revenues in the second quarter of 2007 were $6.8 billion; including divested businesses they totaled $8.1 billion.

All of the company's operating segments achieved double-digit after-tax operating income increases over the prior quarter. The company's downstream Engineered Products and Solutions segment again achieved an all-time quarterly after-tax increase.

"Each of our operating groups grew their top line this quarter, but more importantly they achieved profitable growth as they achieved strong after-tax increases," said Klaus Kleinfeld, Alcoa CEO. "Higher prices for our products and increased volumes more than offset the increased input costs facing the entire industry."

Allegheny Technologies

'Good Returns in an Uncertain Time'

Allegheny Technologies Inc., Pittsburgh, reported net income for second-quarter 2008 of $168.9 million on sales of $1.46 billion, down about 18 percent from net income of $206.5 million on comparable sales of $1.47 billion in second-quarter 2007.

"The second quarter demonstrates our ability to deliver good returns during an uncertain time. ATI is benefiting from our ongoing transformation, and our product, market and geographic diversification," said L. Patrick Hassey, chairman, president and CEO. "Return on capital employed of 24 percent, return on stockholders' equity of 30 percent, and overall operating profit of nearly 19 percent of sales represent outstanding performance for any industrial company."

Commenting on the company's products, Hassey said a combination of steady demand from aerospace and growing demand from the global industrial markets resulted in total titanium shipments of nearly 24 million pounds for the first half 2008, a...

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