AK Steel (AKS) Gets Slaughtered

AK Steel (AKS) shares took a big hit today after the steel company warned that iron ore prices could impact second quarter earnings. According to Credit Suisse iron ore prices could rise anywhere from 30 to 56%. AK Steel shares dropped over 7% to end the day under $20. AK Steel "warned it cannot reliably estimate its second-quarter" earnings. This was terrible news for a company with a relatively positive earnings report. Earnings and sales met analyst expectations of 25 cents per share and revenue was $1.4 billion dollars. The rise in basic material costs may be a warning to suppliers that inflation is rearing its ugly head back in the market. According to Marketwatch "Steelmakers will pass along higher commodity prices to manufacturers who, naturally, will pass it along to consumers."