Friday, February 4, 2011

Arcelor Mittal (NYSE: MT): Q4 Earnings Preview 2010

Arcelor Mittal (NYSE: MT), the world's largest steelmaker, is scheduled to release its fourth-quarter earnings before the opening bell on Tuesday, February 8, 2011. Analysts, on average, expect the company to report earnings of 18 cents a share on revenue of $20.88 billion. In the year ago period, the company reported earnings of 68 cents per share on revenue of $18.64 billion.

Arcelor Mittal produces and markets steel worldwide. It provides a range of finished and semi-finished carbon and stainless steel products. The Company has steel-making operations in 20 countries on four continents, including 65 integrated, mini-mill and integrated mini-mill steel-making facilities.

In the preceding third quarter, the Luxembourg-based company's net income was $1.35 billion, or 89 cents per share, compared to $910 million, or 60 cents per share, in the year-ago period. Revenue increased 30% to $21.04 billion $16.17 billion. Analysts, on average, expect the company to report earnings of 41 cents per share on revenue of $21.36 billion. Looking ahead, the company expects fourth-quarter EBITDA to be between $1.5 billion and $1.9 billion.

At its last earnings call in October, the company said that it expects EBITDA to fall to $1.5 billion to $1.9 billion in the fourth quarter. “Our outlook for the fourth quarter remains cautious as the expected higher input prices continue to work through the business and demand remains muteds,” Chief Executive Officer Lakshmi Mittal said in a statement.

Earnings in the December quarter are likely to be weaker because of lower international steel prices and the seasonal slowdown. Steel consumption may rise 5.3 percent this year to a record, according to World Steel Association forecasts.

Steel producers have been squeezed by rising raw materials costs and a lack of visibility on the demand for steel output in developed regions. Floods in Australia’s Queensland state closed mines and further pushed up coking-coal prices. Steelmakers also faced volatile prices last year as they bought ore and coal for immediate delivery or in quarterly agreements after the collapse of a four-decade-old annual pricing system.

Recently, the company said that its shareholders have approved the spin-off of the company's stainless and specialty steels business into a newly created company, a move that may spark consolidation in a European industry burdened by over-capacity. Aperam produces stainless, electrical and specialty steel. The unit has launched an initiative to target management gains and profit improvements of $250 million over the next two years.

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