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ArcelorMittal's (MT) Q1 Earnings Top Estimates, Revenues Lag
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ArcelorMittal (MT - Free Report) recorded first-quarter 2023 profits of $1,096 million or $1.27 per share, down from $4,125 million or $4.27 in the year-ago quarter. Earnings surpassed the Zacks Consensus Estimate of 83 cents.
Total sales fell around 16.27% year over year to $18,601 million in the quarter. The figure lagged the Zacks Consensus Estimate of $18,769.3 million. Sales were hurt by lower average steel selling prices and reduced steel shipments.
NAFTA: Sales were down around 10.9% year over year to $3,350 million in the reported quarter. Crude steel production increased 4.7% year over year to 2.2 million metric tons, impacted by labor actions in Long Products Canada. Shipments jumped 15.8% to 2.8 million metric tons, primarily due to higher shipments in Mexico.
Brazil: Sales fell around 8.9% year over year to $3,068 million. Crude steel production declined roughly 7.4% year over year to 3.1 million metric tons. Shipments decreased 10.5% to 2.9 million metric tons, primarily due to lower exports.
Europe: Sales decreased around 16.4% year over year to $10,903 million. Crude steel production fell roughly 10.5% year over year to 7.8 million metric tons in the reported quarter. Shipments fell around 7% to 7.8 million metric tons.
ACIS: Sales fell approximately 30.7% year over year to $1,445 million. Crude steel production totaled 1.5 million metric tons, down about 39.5% year over year. Shipments declined 27.5% to around 1.5 million metric tons.
Mining: Sales fell around 3.1% year over year to $904 million. Iron ore production totaled 6.7 million metric tons, down about 3.3% from the year-ago quarter’s levels. Iron ore shipments were up around 11.3% at 7.4 million metric tons.
Financials
At the end of the first quarter, ArcelorMittal had cash and cash equivalents of $6,290 million, up around 12.9% year over year. The company’s long-term debt was about $8,650 million, up 37.1% on a year-over-year basis.
Net cash from operating activities was $949 million in the first quarter, down from $2,034 million in the prior-year period.
Outlook
As projected, apparent demand conditions improved once the destocking phase reached its maturity in the first quarter of 2023. Despite ongoing obstacles to real demand, the absence of further destocking is likely to maintain stronger apparent demand in 2023 compared to 2022, the company noted.
The company sees world apparent steel consumption, excluding China, to rise by 2-3% year over year in 2023. ArcelorMittal also expects its steel shipments to grow roughly 5% in 2023.
Price Performance
Shares of ArcelorMittal have declined 1.5% in the past year against an 11% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
MT currently sports a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks in the Basic Materials space include Steel Dynamics, Inc. (STLD - Free Report) , Linde plc (LIN - Free Report) and PPG Industries, Inc. (PPG - Free Report)
Steel Dynamics currently carries a Zacks Rank #2 (Buy). Shares of STLD have gained 27.2% in the past year. It topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 10.7% on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
Linde, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 12.2% for the current year. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 4.8% upward in the past 60 days. It has a trailing four-quarter earnings surprise of 6.9%, on average. The stock has gained 22% over the past year.
PPG Industries currently carries a Zacks Rank #2 and has a projected earnings growth rate of 19.83% for the current year. Shares of PPG have gained 8.5% in the past year. It delivered a trailing four-quarter earnings surprise of 6.8% on average.
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ArcelorMittal's (MT) Q1 Earnings Top Estimates, Revenues Lag
ArcelorMittal (MT - Free Report) recorded first-quarter 2023 profits of $1,096 million or $1.27 per share, down from $4,125 million or $4.27 in the year-ago quarter. Earnings surpassed the Zacks Consensus Estimate of 83 cents.
Total sales fell around 16.27% year over year to $18,601 million in the quarter. The figure lagged the Zacks Consensus Estimate of $18,769.3 million. Sales were hurt by lower average steel selling prices and reduced steel shipments.
ArcelorMittal Price, Consensus and EPS Surprise
ArcelorMittal price-consensus-eps-surprise-chart | ArcelorMittal Quote
Segment Review
NAFTA: Sales were down around 10.9% year over year to $3,350 million in the reported quarter. Crude steel production increased 4.7% year over year to 2.2 million metric tons, impacted by labor actions in Long Products Canada. Shipments jumped 15.8% to 2.8 million metric tons, primarily due to higher shipments in Mexico.
Brazil: Sales fell around 8.9% year over year to $3,068 million. Crude steel production declined roughly 7.4% year over year to 3.1 million metric tons. Shipments decreased 10.5% to 2.9 million metric tons, primarily due to lower exports.
Europe: Sales decreased around 16.4% year over year to $10,903 million. Crude steel production fell roughly 10.5% year over year to 7.8 million metric tons in the reported quarter. Shipments fell around 7% to 7.8 million metric tons.
ACIS: Sales fell approximately 30.7% year over year to $1,445 million. Crude steel production totaled 1.5 million metric tons, down about 39.5% year over year. Shipments declined 27.5% to around 1.5 million metric tons.
Mining: Sales fell around 3.1% year over year to $904 million. Iron ore production totaled 6.7 million metric tons, down about 3.3% from the year-ago quarter’s levels. Iron ore shipments were up around 11.3% at 7.4 million metric tons.
Financials
At the end of the first quarter, ArcelorMittal had cash and cash equivalents of $6,290 million, up around 12.9% year over year. The company’s long-term debt was about $8,650 million, up 37.1% on a year-over-year basis.
Net cash from operating activities was $949 million in the first quarter, down from $2,034 million in the prior-year period.
Outlook
As projected, apparent demand conditions improved once the destocking phase reached its maturity in the first quarter of 2023. Despite ongoing obstacles to real demand, the absence of further destocking is likely to maintain stronger apparent demand in 2023 compared to 2022, the company noted.
The company sees world apparent steel consumption, excluding China, to rise by 2-3% year over year in 2023. ArcelorMittal also expects its steel shipments to grow roughly 5% in 2023.
Price Performance
Shares of ArcelorMittal have declined 1.5% in the past year against an 11% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
MT currently sports a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks in the Basic Materials space include Steel Dynamics, Inc. (STLD - Free Report) , Linde plc (LIN - Free Report) and PPG Industries, Inc. (PPG - Free Report)
Steel Dynamics currently carries a Zacks Rank #2 (Buy). Shares of STLD have gained 27.2% in the past year. It topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 10.7% on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
Linde, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 12.2% for the current year. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 4.8% upward in the past 60 days. It has a trailing four-quarter earnings surprise of 6.9%, on average. The stock has gained 22% over the past year.
PPG Industries currently carries a Zacks Rank #2 and has a projected earnings growth rate of 19.83% for the current year. Shares of PPG have gained 8.5% in the past year. It delivered a trailing four-quarter earnings surprise of 6.8% on average.