ArcelorMittal (AM) is reporting a net income of $1.704 billion or $1.13 per share in the second quarter of 2010, compared to a net income of $679 million or 45 cents in the first quarter and a net loss of $1.184 billion or 70 cents in the year-ago period.

“The improved performance in the second quarter is in line with our expectations and reflects the continued slow and progressive recovery,” AM Chair and CEO Lakshmi Mittal said in a statement released today. “Although the third quarter will be impacted by a combination of seasonal factors and the effects of the economic slowdown in China, underlying demand continues to show improvement. The challenge for the second half of the year will be to pass on the full extent of cost increases to our customers.”

“Separately, we are assessing the spin-off of our stainless division from the remainder of the group,” Mittal added. “We have confidence in the future of the stainless business and believe that the creation of a separately focused company will create additional value for all shareholders.”

Some second-quarter numbers:

•Sales of $21.651 billion, compared to $18.652 billion in the first quarter and $15.176 billion in the year-ago period.

•Shipments of 22.8 million metric tons, compared to 21.5 million in the first quarter and 17 million in the year-ago period.

•Crude steel production of 24.8 million metric tons, compared to 23.1 million in the first quarter and 15.9 million in the year-ago period.

•Operating income per ton of $76, compared to $32 per ton in the first quarter and an operating loss of $70 per ton in the year-ago period.

•Capacity utilization increased to 78 percent from 72 percent in the first quarter.

Shipments are expected to be lower in the third quarter and capacity utilization drop to around 70 percent due to seasonal slowdown, the company said.

Average selling prices are expected to remain stable and operating costs are expected to increase as compared to the second quarter due largely to higher raw material prices.

The Flat Carbon America segment posted the following numbers in the second quarter:

•An operating income of $819 million, compared to $326 million in the first quarter and an operating loss of $356 in the year-ago period.

•Sales of $5.135 billion, compared to $4.431 billion in the first quarter and $2.766 billion in the year-ago period.

•The average selling price was $810 per ton, compared to $722 in the first quarter and $665 in the year-ago period.

•Operating income was $153 per ton, compared to $62 per ton in the first quarter and an operating loss of $102 per ton in the year-ago period.

•Crude steel production was 5.854 million tons, compared to 5.679 million in the first quarter and 3.332 million in the year-ago period.

•Steel shipments were 5.346 million tons, compared 5.271 million in the first quarter and 3.481 million in the year-ago period.

Net debt increased by $400 million in the second quarter to $20.3 billion, compared to $20.7 billion on March 31.

The company reported liquidity in the second quarter of $12.8 billion, compared to $14.5 billion on March 31.

At second quarter’s end, the company has achieved annualized sustainable savings of $3 billion, compared to $2.9 billion on March 31, “meeting its 2010 full-year target to achievement management gains of $3.0 billion.” The company also achieved annualized temporary fixed cost savings of $3.9 billion, “resulting from industrial optimization in response to lower demand.”

Posted 7/28/2010