By KEVIN NEVERS

ArcelorMittal (AM) reported a net income of $5.839 billion or $4.20 basic earnings per share for the second quarter of 2008, compared to $2.371 billion or $1.69 basic earnings per share for the first quarter and $2.723 billion of $1.97 basic earnings per share for the year-ago period.

Other second-quarter numbers:

•EBITDA—operating income plus depreciation—was $8.046 billion, compared to $5.044 billion in the first quarter and $5.326 billion in the year-ago period.

•Operating income was $6.621 billion, compared to $3.614 billion in the first quarter and $5.326 in the year-ago period.

•Sales were $37.840 billion, compared to $29.809 billion in the first quarter and $27.223 billion in the year-ago period.

•Shipments were 29.8 million metric tons, compared to 29.2 million in the first quarter and 28.7 million in the year-ago period.

“We are pleased to report results for the first half of 2008, with EBITDA of $13.1 billion up 35 percent over the same period in 2007,” said AM Chair and CEO Lakshmi Mittal. “This reflects the diversity and strength of the ArcelorMittal business model, in particular the significant diversification of our value chain including our considerable mining operations.”

“We continue to look for opportunities to further enhance our raw material self-sufficiency, with recent investments being announced in Africa, the Americas, and Australia,” Mittal added.

“Our financial strength enables us to continue to invest heavily in the development of the business, particularly relating to brownfield growth and improving product quality and mix,” Mittal said. “This year we expect capital expenditures to reach $7 billion, representing 36 percent of 2007 EBITDA.”

Flat Carbon Americas

The Flat Carbon Americas segment reported the following numbers for the second quarter:

•Total steel shipments were 7.4 million metric tons, compared to 7.6 million metric tons in the first quarter. Excluding the Sparrows Point facility, sold effective May 7, shipments were 7.1 million metric tons for the second quarter, compared to 7 million metric tons in the first quarter.

•Sales were $7.5 billion, compared to $6.5 billion in the first quarter.

•Operating income was $1.4 billion, compared to $880 million in the first quarter.

Operating results “increased primarily due to higher shipments on a comparable basis and higher average selling prices, partially offset by increased output costs,” the company said. Operating income for the second quarter was negatively impacted by $158 million due to a reduction of good will, while it was negatively impacted in the first quarter by a $200 million impairment charges due to the disposal of the Sparrows Point facility.

Other Numbers

•As of June 30, the company’s cash and cash equivalents were $7.5 billion, compared to $7.2 billion on March 31.

•As of June 30, the company’s net debt was $30.7 billion, compared to $27.4 billion on March 31.

•As of June 30, the company has total liquidity of $15.8 billion—cash, cash equivalents, and available bank lines—compared to $13.9 billion on March 31.

•Capital expenditures were $1.4 billion, compared with $1 billion in the first quarter.

•In the second quarter the company returned $1.1 billion to shareholders, consisting of $510 million in cash dividends and $541 million in share buy-backs.

•“The company expects third-quarter EBITDA to exceed $8.5 billion,” AM said. “Flat Carbon Americas EBITDA is expected to significantly increase due to operational improvements and a better operating environment.”

Posted 8/18/2008