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ArcelorMittal's (MT) Q4 Earnings and Revenues Surpass Estimates
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ArcelorMittal (MT - Free Report) recorded profits of $261 million or 30 cents per share in the fourth quarter of 2022, down from $4,045 million or $3.92 in the year-ago quarter. The bottom line in the reported were was hit by a hefty impairment charge associated with property, plant and equipment related to ArcelorMittal Kriviy Rih (Ukraine) in the Asia Africa and CIS (“ACIS”) segment.
Barring one-time items, earnings per share came in at $1.37, topping the Zacks Consensus Estimate of 33 cents.
Total sales fell around 19% year over year to $16,891 million in the quarter. The figure surpassed the Zacks Consensus Estimate of $15,621 million. Sales were hurt by lower average steel selling prices and reduced steel shipments.
Total steel shipments declined around 20% year over year to 12.6 million metric tons in the reported quarter, hurt by significantly lower demand due to destocking.
NAFTA: Sales were down around 12% year over year to $2.9 billion in the reported quarter. Crude steel production fell 1% year over year to 2 million metric tons. Steel shipments rose around 6% year over year to 2.3 million metric tons. Average steel selling price declined roughly 24% year over year.
Brazil: Sales fell around 16% year over year to $2.9 billion. Crude steel production declined roughly 11% year over year to 2.8 million metric tons. Shipments were down 13% year over year to 2.6 million metric tons. Average steel selling price fell around 1% year over year.
Europe: Sales decreased around 17% year over year to $10.1 billion. Crude steel production fell roughly 19% year over year to 7 million metric tons in the reported quarter. Shipments fell around 18% year over year to 6.8 million metric tons. Average steel selling price went down roughly 2% year over year.
ACIS: Sales fell around 52% year over year to $1.2 billion. Crude steel production totaled 1.4 million metric tons, down about 48% year over year. Shipments declined around 46% year over year to around 1.4 million metric tons. Average selling prices declined around 11% year over year.
Mining: Sales fell around 13% year over year to $716 million. Iron ore production totaled 7.5 million metric tons, up around 4% from the year-ago quarter’s levels. Iron ore shipments were down around 3% year over year at 6.9 million metric tons.
FY22 Results
Earnings for full-year 2022 were $10.18 per share compared with $13.49 per share a year ago. Net sales went up around 4% year over year to $79,844 million as higher steel selling prices offset lower steel shipments.
Financials
At the end of 2022, ArcelorMittal had cash and cash equivalents of $9,414 million, up around 115% year over year. The company’s long-term debt was around $9,067 million, up roughly 40% on a year-over-year basis.
Net cash from operating activities was $3.6 billion for the fourth quarter and $10.2 billion for full-year 2022. The company ended the quarter with record low net debt of $2.2 billion, compared with $4 billion at the end of 2021.
Outlook
ArcelorMittal noted that it is seeing apparent demand conditions improving as the current destocking phase reaches maturity.
The company sees world apparent steel consumption, excluding China, to recover by 2-3% year over year in 2023. ArcelorMittal also expects its steel shipments to grow by roughly 5% year over year in 2023.
While real consumption growth is anticipated to remain lackluster in the United States, the expected end of destocking is predicted to lead to a rise in apparent consumption by 1.5-3.5% in 2023.
The company envisions a modest decline in real demand this year in Europe. However, it expects apparent demand to recover by 0.5-2.5% in 2023.
ArcelorMittal also expects a strong recovery in economic growth in China in 2023 as COVID-19 restrictions are being lifted. However, factoring in the sustained softness in real estate during the year, it projects steel consumption to stabilize in 2023 (+1% to -1%) with potential upside dependent on China government’s infrastructure stimulus.
The company also expects positive free cash flow generation in 2023. Capital expenditure is expected to rise to the $4.5-$5 billion range in 2023.
Price Performance
Shares of ArcelorMittal have declined 3.2% in the past year compared with a 13.2% fall of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
ArcelorMittal currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , Commercial Metals Company (CMC - Free Report) and Nucor Corporation (NUE - Free Report) .
Steel Dynamics currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for STLD's current-year earnings has been revised 25.2% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 11.3%, on average. STLD has rallied around 99% in a year.
Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 10% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 16.7%, on average. CMC has gained around 56% in a year.
Nucor currently carries a Zacks Rank #1. The Zacks Consensus Estimate for NUE’s current-year earnings has been revised 13.4% upward in the past 60 days.
Nucor beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 7.7% on average. NUE’s shares have gained roughly 40% in the past year.
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ArcelorMittal's (MT) Q4 Earnings and Revenues Surpass Estimates
ArcelorMittal (MT - Free Report) recorded profits of $261 million or 30 cents per share in the fourth quarter of 2022, down from $4,045 million or $3.92 in the year-ago quarter. The bottom line in the reported were was hit by a hefty impairment charge associated with property, plant and equipment related to ArcelorMittal Kriviy Rih (Ukraine) in the Asia Africa and CIS (“ACIS”) segment.
Barring one-time items, earnings per share came in at $1.37, topping the Zacks Consensus Estimate of 33 cents.
Total sales fell around 19% year over year to $16,891 million in the quarter. The figure surpassed the Zacks Consensus Estimate of $15,621 million. Sales were hurt by lower average steel selling prices and reduced steel shipments.
Total steel shipments declined around 20% year over year to 12.6 million metric tons in the reported quarter, hurt by significantly lower demand due to destocking.
ArcelorMittal Price, Consensus and EPS Surprise
ArcelorMittal price-consensus-eps-surprise-chart | ArcelorMittal Quote
Segment Review
NAFTA: Sales were down around 12% year over year to $2.9 billion in the reported quarter. Crude steel production fell 1% year over year to 2 million metric tons. Steel shipments rose around 6% year over year to 2.3 million metric tons. Average steel selling price declined roughly 24% year over year.
Brazil: Sales fell around 16% year over year to $2.9 billion. Crude steel production declined roughly 11% year over year to 2.8 million metric tons. Shipments were down 13% year over year to 2.6 million metric tons. Average steel selling price fell around 1% year over year.
Europe: Sales decreased around 17% year over year to $10.1 billion. Crude steel production fell roughly 19% year over year to 7 million metric tons in the reported quarter. Shipments fell around 18% year over year to 6.8 million metric tons. Average steel selling price went down roughly 2% year over year.
ACIS: Sales fell around 52% year over year to $1.2 billion. Crude steel production totaled 1.4 million metric tons, down about 48% year over year. Shipments declined around 46% year over year to around 1.4 million metric tons. Average selling prices declined around 11% year over year.
Mining: Sales fell around 13% year over year to $716 million. Iron ore production totaled 7.5 million metric tons, up around 4% from the year-ago quarter’s levels. Iron ore shipments were down around 3% year over year at 6.9 million metric tons.
FY22 Results
Earnings for full-year 2022 were $10.18 per share compared with $13.49 per share a year ago. Net sales went up around 4% year over year to $79,844 million as higher steel selling prices offset lower steel shipments.
Financials
At the end of 2022, ArcelorMittal had cash and cash equivalents of $9,414 million, up around 115% year over year. The company’s long-term debt was around $9,067 million, up roughly 40% on a year-over-year basis.
Net cash from operating activities was $3.6 billion for the fourth quarter and $10.2 billion for full-year 2022. The company ended the quarter with record low net debt of $2.2 billion, compared with $4 billion at the end of 2021.
Outlook
ArcelorMittal noted that it is seeing apparent demand conditions improving as the current destocking phase reaches maturity.
The company sees world apparent steel consumption, excluding China, to recover by 2-3% year over year in 2023. ArcelorMittal also expects its steel shipments to grow by roughly 5% year over year in 2023.
While real consumption growth is anticipated to remain lackluster in the United States, the expected end of destocking is predicted to lead to a rise in apparent consumption by 1.5-3.5% in 2023.
The company envisions a modest decline in real demand this year in Europe. However, it expects apparent demand to recover by 0.5-2.5% in 2023.
ArcelorMittal also expects a strong recovery in economic growth in China in 2023 as COVID-19 restrictions are being lifted. However, factoring in the sustained softness in real estate during the year, it projects steel consumption to stabilize in 2023 (+1% to -1%) with potential upside dependent on China government’s infrastructure stimulus.
The company also expects positive free cash flow generation in 2023. Capital expenditure is expected to rise to the $4.5-$5 billion range in 2023.
Price Performance
Shares of ArcelorMittal have declined 3.2% in the past year compared with a 13.2% fall of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
ArcelorMittal currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , Commercial Metals Company (CMC - Free Report) and Nucor Corporation (NUE - Free Report) .
Steel Dynamics currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for STLD's current-year earnings has been revised 25.2% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 11.3%, on average. STLD has rallied around 99% in a year.
Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 10% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 16.7%, on average. CMC has gained around 56% in a year.
Nucor currently carries a Zacks Rank #1. The Zacks Consensus Estimate for NUE’s current-year earnings has been revised 13.4% upward in the past 60 days.
Nucor beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 7.7% on average. NUE’s shares have gained roughly 40% in the past year.