Dahlman Rose & Co. Is Concerned About AK Steel's (AKS) Future Results

Dahlman Rose & Co. analysts are worried that rising iron ore and met coal prices could hurt AK Steel Holding Corporation's AKS future results. AK Steel (AKS) reported earnings on Tuesday, and its EPS was better than Dahlman Rose & Co. expected. The reason for that were increased margins, due to lower than expected iron ore prices. Analysts explained that AK Steel (AKS) hasn't yet made a deal with its major suppliers, and that leaves it exposed to potential price hikes in the iron ore. AK Steel's management expects 65% increase in iron ore price, but Dahlman Rose & Co. expects a bigger increase than that. ArcelorMittal (ADR) MT, Rio Tinto plc (ADR) RTP and Cliffs Natural Resources Inc CLF are the major suppliers of iron ore for AK Steel. Dahlman Rose & Co. decided to lower its expectations for AK Steel's (AKS) 2010 and 2011 EPS. Analysts believe that AKS will have EPS of $0.70 in 2010, and $1.50 in 2011. They also think that there will be a limited downside for AKS shares, but it won't outperform either.