ArcelorMittal (AM) is reporting a net income of $900 million or 60 cents per share in the third quarter of 2009, compared to a net loss of $800 million of 57 cents per share in the second quarter and a net income of $3.8 billion or $2.79 per share in the year-ago period.

“As anticipated, we have seen the first signs of recovery in the third quarter,” AM Chair and CEO Lakshmi Mittal said in a statement released today. “In response to this increased demand, a number of our facilities have now been re-started and we expect fourth-quarter crude steel capacity utilization to be approximately 70 percent. We should continue to see further gradual improvement through 2010, although the operating environment remains challenging.”

“Shipments and average steel selling prices are expected to be higher in the fourth quarter of 2009 than in the third quarter,” the statement said. “In addition, the company expects fixed costs to increase due to the expected increase in activity in the fourth quarter.”

Sales were $16.2 billion, compared to $15.2 billion in the second quarter and $35.2 billion in the year-ago period. “Despite the improved demand during the third quarter of 2009 as compared to the second quarter of 2009, sales remain substantially lower year-on-year due to the global economic crisis, including a steep fall in selling prices.”

Shipments were 18.2 million metric tons, compared to 17 million metric tons in the second quarter and 25.6 million metric tons in the year-ago period.

The company reported an operating income of $300 million, compared to an operating loss of $1.2 billion for the second quarter and an operating income of $5.5 billion for the year-ago period.

Capacity utilization increased to around 61 percent, compared to 50 percent in the second quarter.

Flat Carbon Americas reported an operating income of $100 million, compared to an operating loss of $400 million in the second quarter.

Sales increased to $3.3 billion, compared to $2.8 billion in the second quarter, “due to higher volumes offsets by slightly lower prices (a 1.8-percent decrease in average steel selling price),” the statement said.

Shipments were higher at 4.2 million metric tons, compared to 3.5 million metric tons in the second quarter.

On Sept. 30 the company had net cash from operating activities of $2.4 billion, compared to $1.7 billion on June 30; cash and cash equivalents of $5.9 billion, compared to $7.3 billion on June 30; liquidity of $18.4 billion, compared to $22.7 billion on June 30; and net debt of $21.6 billion, compared to $22.9 billion on June 30.

At the end of the third quarter, the company had achieved annualized sustainable saving of $2.2 billion and $7.3 billion of annualized temporary fixed cost savings, the latter “resulting from industrial optimization in response to lower demand,” the statement said.

Posted 10/28/2009