AK Steel Holding Corporation (NYSE:AKS) announced that it had reached a new labor agreement with some 1,200 union employees at its Butler Works facility. The deal is worth revisiting to know what the agreement means, what AK Steel revealed about it and what the company decided to keep under wraps.
Two-year labor agreement
AK Steel has been in labor talks with the United Auto Workers Local 3303 that represents its hourly union workers at the Butler Works facility. After a period of negotiation, a deal was reached. Therefore, on August 8 and August 9, the workers voted to approve the labor agreement that covers two and a half years until April 2019. The ratification vote came at 576-390.
The old agreement
The new labor agreement that AK Steel has entered into with its Butler Works employees will replace the existing one that was supposed to run between October 1, 2012 and October 1, 2016. The former agreement was reached in July 2012.
AK Steel noted in a statement that the early agreement with its Butler Works employees removes uncertainty in the operations of the facility. The company added that the new agreement puts it in a great position to continue addressing the future needs of its customers.
AK Steel’s Butler Works plant produces a range of flat-rolled steel products as well as a variety of stainless and carbon steels.
What AK Steel never told you
As much as AK Steel tried to share most of the important information regarding its new agreement with its union employees at the Butler Works facility, the company sat on some details. For instance, the company didn’t reveal the financial terms of the deal.
How AK Steel fared in 2Q
A look at AK Steel’s most recent financial performance scorecard shows that the company posted EPS profit of $0.08 in 2Q2016. That was better than EPS loss of $0.36 in the same quarter last year. AK Steel also exceeded the expectation of Wall Street that called for EPS of $0.04.
However, revenue of $1.49 billion that AK Steel generated in 2Q fell 11.8% YoY and missed the consensus estimate of $1.51 billion. Product shipment also declined in 2Q and the company said that it expects a modest decline in the current quarter as well.