* U.S. Steel expects Q2 overall operating profit
* AK Steel expects Q2 boost in shipments, prices
* AK Steel shares up 6 pct; U.S. Steel's drop 4 pct (Adds comments from U.S. Steel's CEO and analyst, updates share prices)
By Steve James
NEW YORK, April 26 (Reuters) - Two major U.S. steelmakers reported contrasting quarterly results on Tuesday, but both gave positive outlooks for the industry as improving economic conditions boost demand and prices.
U.S. Steel Corp (X.N) stock fell 4 percent to close at $49.72 as it reported a wider-than-expected loss in the first quarter, while AK Steel's (AKS.N) shares rose 6.3 percent to $16.96 as its results beat Wall Street estimates.
"We expect to report a significant overall operating profit (in the second quarter), primarily due to the realization of price increases in our flat-rolled segment," U.S. Steel Chairman and Chief Executive Officer John Surma said.
AK Steel (AKS.N) said it expected a strong increase in second-quarter steel shipments from the first quarter with average per-ton selling prices 7 percent higher.
"AK Steel had a terrific quarter, and we expect much more ahead," said analyst Charles Bradford of Bradford Research. "The comparison between this company and U.S. Steel couldn't be more stark.
"AK is completely naked (exposed) on raw materials. They have to pay full market price," he said. "U.S. Steel has its own raw materials (sources) and they reported a loss."
In a later call with Wall Street analysts, U.S. Steel's Surma addressed the issue, saying the company was looking at a strategic overhaul of raw material use to cut costs and reduce dependence on coking coal by using natural gas instead. It might even convert some blast furnaces that burn coal and iron ore to electric arc furnaces that make steel using scrap.
"We're considering strategies to take advantage of our significant iron ore resource position and the abundance of natural gas in North America to further reduce our dependence on raw materials such as coal and coke," he said.
U.S. Steel posted a third consecutive quarterly loss, but higher steel prices and shipments helped it trim the red ink from the previous year.
The net loss narrowed to $86 million, or 60 cents per share, from $157 million, or $1.10 per share, a year earlier, the Pittsburgh-based company said. Analysts were expecting a loss of 37 cents a share.
AK Steel posted a higher first-quarter net profit of $8.7 million, or 8 cents per share, compared with $1.9 million, or 2 cents per share, for the same quarter of 2010. Analysts on average were expecting a loss of 1 cent per share, according to Thomson Reuters I/B/E/S.
Analyst Mark Parr, of KeyBanc Capital Markets, said AK Steel's results reflected "strong underlying cost performance in the face of iron ore and coal cost pressures.
"AKS is getting back to basics, with solid operational execution beginning to be revealed," he wrote in a note.
Commenting on the first quarter, U.S. Steel's Surma noted "improving economic conditions and firm customer demand" led to increased average realized prices, shipments and raw steel capability utilization for the company's North American and European flat-rolled operations.
He said average realized prices increased by $63 per ton in the first quarter to $720 per ton as the company began to realize the benefits of increased spot market and some contract prices. Shipments increased by 3 percent to 4 million net tons as customer demand for carbon flat-rolled products continued to moderately increase in line with economic growth. The improvements were partially offset by increased raw materials costs, Surma said.
Looking ahead, he said flat-rolled results for the second quarter are expected to improve significantly compared to the first quarter, driven largely by significantly higher average realized prices.
Raw materials costs are expected to remain relatively stable. "While recent order rates have moderated, we remain cautiously optimistic that improving global economic conditions will continue, further stimulating end-user demand," Surma said.
Ohio-based AKS said it expects shipments in the second quarter to be between 1,500,000 and 1,550,000 tons -- up from 1,423,100 tons shipped in the first quarter.
The company anticipates its second-quarter average per-ton selling price will be approximately 7 percent higher than the first quarter, with an operating profit of about $65 per ton.
It said its average selling price for the first quarter was $1,109 per ton, which is about 9 percent higher than the first quarter of 2010. (Reporting by Steve James and Matt Daily; Editing by Maureen Bavdek, Dave Zimmerman)