ArcelorMittal Posts 1Q Loss, Reaffirms Outlook - Analyst Blog
13 Maggio 2013 - 9:20AM
Zacks
Steel bellwether ArcelorMittal (MT) posted a
net loss of $0.3 billion or 21 cents per share in the first quarter
of 2013 compared with a net income of $92 million or 6 cents per
share a year ago. Analysts polled by Zacks were expecting earnings
of 7 cents a share on an average for the quarter. Challenging
economic conditions, especially in Europe, weighed on the bottom
line in the quarter.
Revenues declined 13% year over year to $19.8 billion in the
reported quarter. Sales increased 2.3% on a sequential basis due to
higher steel shipment volumes. Shipments declined 5.9% year over
year to 20.9 million metric tons in the quarter.
Segment Review
Flat Carbon Americas: Production declined 0.8%
year over year to 6.2 million tons but increased sequentially by
12% due tohigher production in North America. Average selling
prices went down 7.6% year over year to $819 per ton. Sales went
down 7.8% annually, but were up 3.8% sequentially to $4,859 million
due to due primarily to higher steel selling prices in South
America and Mexico.
Flat Carbon Europe: Revenues slid 11.5% year
over year but jumped 11.3% sequentially to $6,834 million mainly
due to higher steel shipment volumes. Steel production fell 1.4%
from the last year and increased 14.2% sequentially due to the
restart of furnaces at Asturias and blast Dunkerque. Average
selling prices went down 3.5% from the last year to $831 per
ton.
Long Carbon Americas and Europe: Revenues from
the segment dropped 11.5% year over year and 2.5% sequentially to
$5,103 million. Sales were affected by reduced prices in the
Tubular business. Average selling prices fell around 5.7% year over
year to $858 per ton. Production declined 1.1% on a year over year
basis while increased 9.2% sequentially, due to a stock
rebuild following weak demand in the fourth quarter of and recovery
from operational issues that had impacted output in Poland during
the fourth quarter.
Asia Africa and CIS (AACIS): Sales slipped
23.6% from the year-ago quarter and were almost flat from the
previous quarter at $2,129 million. Sales were positively affected
by higher average steel selling prices in South Africa and
Kazakhstan.Average selling price was $620 per ton compared with
$705 per ton in the year-ago quarter.
Distribution Solutions: Revenues declined
almost 19.8% year over year and 7.7% on a sequential basis to
$3,553 million. The sequential decline reflected lower steel
shipment volumes. Average steel selling prices declined 7.4% year
over year to $851 per ton.
Mining: Iron ore production fell 0.8% year over
year and 6.4% from the previous quarter to 13.1 million tons in the
reported quarter. Coal production declined 4.8% year over year and
was flat sequentially at 2 million tons. Revenues fell 7.6% year
over year and 6.3% sequentially to $1,199 million.
Balance Sheet
Cash and cash equivalents (including restricted cash) amounted
to $8 billion as of Mar 31, 2013, compared with $4.9 billion as of
Mar 31, 2012. The company’s net debt was $18 billion as of Mar 31,
2013, as compared with $23.6 billion as of Mar 31, 2012.
Dividend
ArcelorMittal announced, during third-quarter 2012, that it will
reduce the annual dividend to 20 cents per share in 2013 from 75
cents per share in 2012. The reduced dividend will be paid in Jul
2013. During the reported quarter, the company paid dividends worth
$34 million including $28 million for the perpetual bond as
compared with $294 million in the year ago quarter.
Outlook
ArcelorMittal reiterated its outlook for 2013 and expects to
report earnings before interest, tax, depreciation and amortization
(EBITDA) above $7.1 billion assuming that the prices of iron ore
and the margin of steel prices over raw material costs in 2013 will
be similar to 2012 levels. The company expects that profitability
will be driven by a 2% increase in steel shipments, about 20%
increase in marketable iron ore shipments, and the realized
benefits from Asset Optimization and Management Gains
initiatives.
ArcelorMittal forecasts to spend about $3.5 billion on capital
expenditures in 2013, of which, $2.7 billion is non-growth
related.
For the second quarter of 2013, ArcelorMittal expects EBITDA to
be higher than the first quarter of 2013 leading to a reduction in
net debt to roughly $17 billion by end-June 2013.
At its investor day in March 2013, ArcelorMittal laid down a new
management gains improvement target of $3 billion by the end of
2015, which is expected to yield roughly $1 billion of savings over
each of the next 3 years.
ArcelorMittal currently maintains a Zacks Rank #3 (Hold).
Other companies in the steel industry with favorable Zacks Ranks
are Angang Steel Company Limited (ANGGY),
LB Foster Co. (FSTR) and Ternium
S.A. (TX). All of them hold a Zacks Rank #2 (Buy).
ANGANG STEEL LT (ANGGY): Get Free Report
FOSTER LB CO (FSTR): Free Stock Analysis Report
ARCELOR MITTAL (MT): Free Stock Analysis Report
TERNIUM SA-ADR (TX): Free Stock Analysis Report
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