Why Algoma Steel Stock Dropped Today
Shares of Algoma Steel Group (NASDAQ: ASTL) are down 6.7% as of 11:30 a.m. ET after the Canadian steel company missed earnings estimates Wednesday night.
Expectations were already pretty low heading into Algoma's fiscal Q4 2023 report. Analysts had forecast that it would lose $0.03 per share on about $670 million in sales, or 29% less than the company sold one year ago. As it turned out, Algoma's loss was much bigger than expected -- $0.19 per share -- despite revenue of $677.4 million being a bit better than feared.
This was obviously not the kind of news investors wanted to hear. While sales exceeded expectations by not falling 29% year over year, they did still decline 28%. However, Algoma shipped more steel in this year's fiscal Q4 than last year's -- 571,647 tons. So the decline in sales wasn't due to any fault of Algoma's, but rather was a simple result of commodity steel being cheaper this year than last -- about 31% cheaper at an average cost per ton of $1,185 -- leading to in lower sales and pushing the company into a small loss in contrast to last year's big net profit.
Source Fool.com
