ArcelorMittal (MT), the world's largest steelmaker, Wednesday said it swung to a net profit in the second quarter on a slow recovery in demand but said the third quarter will be hit by a seasonal dip in demand and economic slowdown in China.

The company also said that it's assessing a spin-off of its stainless steel business to add value for its shareholders.

The Luxembourg-based steelmaker posted a net profit of $1.7 billion in the three months to June 30 after a net loss of $792 million in the year-ago period. A Dow Jones Newswires poll of 14 analysts forecast a net profit of $1.26 billion.

Second quarter earnings before interest, taxes, depreciation and amortization, or Ebitda, of $3.0 billion was above $1.22 billion a year ago and higher than $1.89 billion in the first quarter. The Dow Jones Newswires poll had forecast Ebitda of $2.86 billion.

The steelmaker said that in the third quarter, it expects its closely-watched Ebitda to be between $2.1 billion and $2.5 billion.

"The improved performance in the second quarter is in line with our expectations and reflects the continued slow and progressive recovery," said Chief Executive Lakshmi Mittal. "The challenge for the second half of the year will be to pass on the full extent of cost increases to our customers."

Second quarter revenue rose to $21.65 billion from $15.2 billion in the same period a year ago.

ArcelorMittal shares, listed on Euronext Netherlands, closed Tuesday at EUR24.72.

-By Devon Maylie; Dow Jones Newswires; (4420) 7842 9483; devon.maylie@dowjones.com
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