AK Steel Corp. executives say they believe 2013 will be better than 2012, despite the company’s $1 billion net loss last year.

As Butler County’s third largest employer, the success of AK Steel is closely tied to local fortunes. AK Steel carries approximately 2,400 full-time jobs locally between its West Chester Twp. headquarters and Middletown steel plant.

Four consecutive years of net losses has some residents and area businesses depending on the steelmaker closely watching the company’s performance. Many remember the effects of AK Steel’s yearlong lockout at Middletown Works that began in 2006, which sent Middletown into hard economic times before the Great Recession.

“We are under the assumption they are going to be there. They’re going to have hiccups here and there with these issues,” said Andy Schuster, president of Hamilton steel processor Matandy Steel and Metal Products, which counts AK among its vendors. “We’re not alarmed.”

Slow economic growth and tough competition brought AK Steel’s sales last year down to below $6 billion, the company reported Tuesday, Jan. 29. Full-year financial results ended with a $1 billion net loss. Excluding a pre-tax pension-related charge and noncash income tax charges, AK Steel had an adjusted 2012 net loss of $64.4 million.

Last year’s loss “is a big issue for the company and this is something that isn’t new,” said Bridget Freas, an equity analyst for Chicago investment research firm Morningstar Inc.

AK Steel has had a hard time being consistently profitable going back into 2008 and has taken on a lot of debt, Freas said. She stressed she believes there’s not a risk of bankruptcy, a cash flow problem or problems with customers and suppliers.

“I would say when you take on this much debt it makes it really difficult to invest in the company,” she said. “Their earnings will grow as the economy strengthens, but I don’t know if they have the same abilities as some of their peers do because of their constrained balance sheet.”

The good news is that the steel plant Middletown Works mainly makes carbon steels for the automotive market, a bright spot in AK Steel’s business.

The steelmaker’s auto business increased last year by about 20 percent, the company said. That may be one reason that Middletown Works didn’t experience the temporary layoffs that other AK Steel plants did in 2012 when steel demand was down overall.

“We’re chugging along. We don’t have any layoffs. They actually hired 15 people,” to fill positions for turnover, said Neil Douglas, president of the union representing the mill’s hourly workers.

The company’s 20 percent increase in auto business “was higher than the overall auto market’s growth in 2012,” James Wainscott, AK Steel chairman, president and chief executive officer, told investors on a conference call about the company’s earnings Tuesday. “In other words, we gained market share last year, and we expect more of the same for 2013,” Wainscott said.

Steel produced by AK Steel’s seven steel plants ends up in automobiles, construction products and appliances, many big ticket items that depend on consumers making more money. Light vehicle sales and new construction are improving in the U.S., but activity is still below pre-2008 recessionary levels, AK Steel officials said.

“Sluggish economic conditions impacted global demand and selling prices for steel products during the fourth quarter and the full-year of 2012,” said Wainscott in a statement. “That said, AK Steel remains well-positioned to take advantage of market opportunities with its high quality, valued-added steels as the economy continues to slowly recover. Taking everything into account, we expect a significantly better first quarter and full-year 2013.”

Because steel demand lacked last year, AK Steel did some temporary layoffs, said company spokesman Barry Racey.

“We constantly have to match operations to customer demand for products,” Racey said.

Some employees at Middletown Works had reduced hours for short periods at a time, but no layoffs, Douglas said. There’s a watch on overtime to keep it at a minimum.

“Everybody knows in the mill money’s tight,” Douglas said. “If they can save on something, they’ll do it.”

Wainscott expects 2013 to be better because the steelmaker will benefit from lower raw material and energy costs to a tune of more than $150 million in savings. AK Steel also intends to reduce cost of operations this year by at least $25 million, which includes strategic purchasing initiatives.