Yahoo Finance ArcelorMittal Positive on Outlook After Earnings Beat
(Bloomberg) -- ArcelorMittal SA, the world’s biggest steelmaker outside of China, remains positive on the medium to long-term outlook for demand after first-quarter earnings beat estimates.
Most Read from Bloomberg
Saudi Arabia Steps Up Arrests Of Those Attacking Israel Online
Trump Auditions VP Picks Before Wealthy Donors in Palm Beach
Huawei Secretly Backs US Research, Awarding Millions in Prizes
The company kept its forecast for apparent consumption of steel outside of China — a key barometer of the world economy — unchanged from three months ago.
“Although overall economic sentiment remains subdued, we expect apparent steel demand ex-China to grow between +3% and +4% this year and are well positioned to benefit from this improvement,” Chief Executive Officer Aditya Mittal said in a statement on Thursday.
The steelmaker said it’s positioned for a recovery in demand, after margins across the steel sector were squeezed last year in the wake of China’s property crisis. Exports from the world’s biggest steelmaker have since weighed on global prices.
“The fact that China, a loss-making steel industry, is exporting such large quantities of steel is evidence of unfair trade,” Daniel Fairclough, head of investor relations, said on a conference call. “That material is subsidized, it’s being dumped into core markets, and it just reinforces the requirement for trade action.”
Chief Financial Officer Genuino Christino said ArcelorMittal would be open to buying Nippon Steel Corp.’s share of a US joint venture called AM/NS Calvert, should the Japanese steelmaker be forced to divest to receive approval for its acquisition of US Steel. “We would be the natural buyers for this stake” in AM/NS Calvert, he said.
The company reported first-quarter earnings before interest, taxes, depreciation and amortization of $1.96 billion, compared with an analyst consensus of $1.71 billion.
That will be a welcome relief for ArcelorMittal after a bruising 12 months. The company was forced to sell its Kazakhstan business last year after a catastrophic mining disaster killed 46 workers and in February, the steelmaker saw its Italian business seized by the country’s government.
ArcelorMittal shares rose as much as 4.5% in Amsterdam before closing the day 3.1% higher at €24.33.
What Bloomberg Intelligence Says
“ArcelorMittal’s 1Q Ebitda beat company-compiled consensus by 8%, but soft steel prices and a cautious outlook statement that refers to subdued market sentiment may temper investor optimism. That’s even as expectations for apparent steel demand ex-China this year are unchanged. The sharp correction in steel prices on both sides of the Atlantic since mid-1Q doesn’t bode well for 2Q earnings.”
— Alon Olsha, BI metals and mining analyst
Click here to read the full research note
(Corrects sixth paragraph to clarify that CFO was commenting on possibility of acquiring stake in AM/NS Calvert)
Most Read from Bloomberg Businessweek
AI Is Helping Automate One of the World’s Most Gruesome Jobs
China Launches Rockets From Sea in Bid to Win the Space Race
©2024 Bloomberg L.P.
