Chesterton Tribune

Arcelor posts weaker 3Q, cites economic uncertainties

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By KEVIN NEVERS

ArcelorMittal (AM) is reporting a net income in the third quarter of 2011 of $659 million or 43 cents per share, compared to $1.535 billion or 99 cents in the second quarter and $1.35 billion or 89 cents in the year-ago period.

“Uncertainties around the economic outlook have increased in recent weeks, impacting the confidence levels of our customers, so as we move in to the (fourth quarter) we are facing both volume and price pressures,” AM Chair and CEO Lakshmi Mittal said in a statement released today.” However, our core profitability is resilient, supported by our growing mine business, our market-leading value-added steel franchise, and our management gains programs.”

AM recorded an income tax expense of $154 million in the third quarter, compared to an income tax expense of $61 million in the second quarter and an income tax benefit of $576 million in the year-ago period.

Outlook

Steel shipments in the fourth quarter are expected to be lower than third-quarter levels, “reflecting economic uncertainties leading to customers adopting a ‘wait-and-see’ approach.”

“Higher iron ore and coal volumes will continue to be a positive underlying factor,” however, with ore production projected to increase by 10 percent by year’s end and coal production by 20 percent.

The company did say that, given “recent market uncertainty,” it will be “focusing on core growth” capital expenditures, with the result that some planned but unspecified steel investments will be postponed. “Accordingly, full year 2011 capital expenditure is expected to be below the previously targeted level of $5.5 billion.”

Other 3Q Numbers

•Sales of $24.214 billion, compared to $25.126 billion in the second quarter and $19.744 billion in the year-ago period.

•Operating income of $1.168 billion, compared to $2.522 billion in the second quarter and $1.028 billion in the year-ago period.

•Shipments of 21.1 million metric tons, compared to 22.2 million in the second quarter and 20.5 million in the year-ago period.

•Crude steel production of 22.4 million metric tons, compared to 24.4 million in the second quarter and 22.2 million in the year-ago period.

•As of Sept. 30, the company had cash and cash equivalents of $2.8 billion, compared to $3.2 billion on June 30. Total liquidity on Sept. 30 was 11.3 billion, compared to $12.3 billion on June 30. Net debt on Sept. 30 was $24.9 billion, compared to $25.0 billion on June 30.

Flat Carbon Americas 3Q

•An operating income of $193 million, compared to $697 million in the second quarter and $166 million in the year-ago period.

•Sales of $5.499 billion, compared to $5.567 billion in the second quarter and $4.394 billion in the year-ago period.

•The average selling price was $910 per ton, compared to $961 in the second quarter and $826 in the year-ago period.

•Operating income was $34 per ton, compared to $126 in the second quarter and $33 in the year-ago period.

•Crude steel production was 5.866 million tons, compared to 6.277 million in the second quarter and 5.932 million in the year-ago period.

•Steel shipments were 5.708 million tons, compared to 5.52 million in the second quarter and 4.979 million in the year-ago period.

 

 

Posted 11/3/2011