TMST - TimkenSteel says melt shop incident weighed on Q3 profitability

TimkenSteel ( NYSE: TMST ) -6% post-market Wednesday after guiding for Q3 adjusted EBITDA of $9M-$12M , saying the late July incident at its melt shop, which resulted in about a month of melt shop downtime and a slower than expected ramp up, "significantly" affected Q3 profitability.

As a result of the melt shop incident, TimkenSteel ( TMST ) said Q3 melt utilization was 40% compared with 84% in Q2.

Q3 commercial net sales fell 24% Q/Q to $316.8M, driven by a 24% decline in shipments to 158.5K tons due to availability of inventory for shipment as a result of the melt shop incident.

The company said demand remains strong across its end markets with a customer order backlog of more than 300K ship tons, the majority of production capacity allocated to customers in 2023, and positive momentum in base pricing.

TimkenSteel ( TMST ) is "financially sound" and should be able to create shareholder value, Hong Chew Eu writes in an analysis published on Seeking Alpha .

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