Back to top

Image: Bigstock

ArcelorMittal (MT) Gears Up for Q1 Earnings: What's in Store?

Read MoreHide Full Article

ArcelorMittal (MT - Free Report) will release first-quarter 2021 results before the bell on May 6. The company’s results are likely to have benefited from higher average steel selling prices and a recovery in demand.

The company beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter negative earnings surprise of 278.5%, on average. It posted an earnings surprise of 125% in the last reported quarter.

Shares of ArcelorMittal have shot up 184.7% in the past year compared with 153.7% rise of the industry.

 


 

 

Let’s see how things are shaping up for this announcement.

What do the Estimates Say?

The Zacks Consensus Estimate for first-quarter sales for ArcelorMittal is currently pegged at $16,515 million, which suggests a rise of 11.3% year over year.

The Zacks Consensus Estimate for revenues in the NAFTA segment is currently pegged at $2,163 million, which calls for a decline of 49.7% year over year. The consensus estimate for average steel selling price stands at $923 per ton, reflecting a year-over-year rise of 29.1%.

Moreover, the consensus mark for revenues in the Brazil segment is currently pegged at $2,560 million, which calls for a year-over-year rise of 60.8%. The same for average steel selling price stands at $849 per ton, reflecting a year-over-year increase of 32.2%.

The consensus mark for revenues in the Europe segment is currently pegged at $8,990 million, which suggests a year-over-year rise of 17.5%. The same for average steel selling price stands at $823 per ton, reflecting a year-over-year rise of 29.6%.

The Zacks Consensus Estimate for revenues in the Asia Africa and CIS (ACIS) segment is currently pegged at $1,978 million, which calls for an increase of 36.8% year over year. The consensus mark for average steel selling price is pinned at $673 per ton, reflecting a year-over-year increase of 42.9%.

The consensus mark for revenues in the Mining segment is currently pegged at $1,596 million, which reflects a year-over-year rise of 61.2%.

Some Factors at Play

ArcelorMittal’s first-quarter results are likely to have benefited from a rebound in end-market demand. It is seeing a rebound in demand, especially in automotive, following the easing of lockdown measures. Moreover, the company is expanding its steel-making capacity and remains focused on shifting to high-added-value products. The company’s cost-reduction initiatives will also likely to have supported profitability in the quarter to be reported.

The company is also likely to have gained from higher steel prices in the first quarter. Its average steel selling prices went up around 6% year over year in the fourth quarter of 2020. The momentum is likely to have continued in the first quarter. Strengthening end-market demand, tight supply and higher raw material costs are driving steel prices. Benefits of higher steel prices are expected to reflect on the company’s bottom line in the March quarter.

 

ArcelorMittal Price and EPS Surprise

 

ArcelorMittal Price and EPS Surprise

ArcelorMittal price-eps-surprise | ArcelorMittal Quote

 

Zacks Model

Our proven model does not conclusively predict an earnings beat for ArcelorMittal this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for ArcelorMittal is 0.00%. The Zacks Consensus Estimate for earnings for the first quarter is currently pegged $1.57. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: ArcelorMittal currently carries a Zacks Rank #1.

Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Koppers Holdings, Inc. (KOP - Free Report) , scheduled to release earnings on May 7, has an Earnings ESP of +5.26% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

CF Industries Holdings, Inc. (CF - Free Report) , scheduled to release earnings on May 5, has an Earnings ESP of +4.53% and carries a Zacks Rank #3.

The Scotts Miracle-Gro Company (SMG - Free Report) , scheduled to release earnings on May 5, has an Earnings ESP of +0.73% and a Zacks Rank #3.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.

Click here for the 4 trades >>