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ArcelorMittal's (MT) Q4 Earnings Beat Estimates, Sales Miss
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ArcelorMittal (MT - Free Report) recorded an adjusted net income of $982 million or $1.18 per share in fourth-quarter 2023 compared with $1.19 billion or $1.37 per share in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate of a loss of $2.08 per share.
Total sales fell around 14% year over year to $14,552 million in the quarter. The figure missed the consensus estimate of $14,950.5 million. The downside was primarily due to a decline in average steel selling prices.
Total steel shipments rose 5.5% year over year to 13.3 million metric tons in the reported quarter. The figure was above our estimate of 11.2 million metric tons.
NAFTA: Sales were flat year over year at $2.94 billion in the reported quarter. Crude steel production increased 8% year over year to 2,185 million metric tons. Steel shipments increased around 10.7% year over year to 2,590 million metric tons, higher than our estimate of 2,116 million metric tons. The average steel selling price declined 7% to $948 per ton.
Brazil: Sales decreased around 6.4% year over year to $2.71 billion. Crude steel production rose 27% year over year to 3,533 million metric tons. Shipments increased 35% year over year to 3,562 million metric tons, higher than our estimate of 2,635 million metric tons. Average steel selling prices fell 17.7% to $852 per ton.
Europe: Sales declined around 20.7% year over year to $7.99 billion. Crude steel production fell roughly 4.7% year over year to 6,630 million metric tons in the reported quarter. Shipments declined around 4% year over year to 6,507 million metric tons, lower than our estimate of 6,147 million metric tons. The average steel selling price declined roughly 10% year over year to $975 per ton.
Asia Africa and CIS (ACIS): Sales fell around 2.4% year over year to $1.2 billion. Crude steel production totaled 1,351 million metric tons, down about 3% year over year. Shipments decreased 6.4% year over year to around 1,323 million metric tons, higher than our estimate of 1,190 million metric tons. Average selling prices dropped about 6% year over year to $677 per ton.
Mining: Sales increased 6.7% year over year to $764 million. Iron ore production totaled 6.2 million metric tons, down around 17% from the year-ago quarter’s levels. Iron ore shipments were down 11.6% year over year to 6.1 million metric tons.
Financials
In the reported quarter, net cash provided by operating activities was $3,328 million compared with $3,634 million in the year-ago quarter. The company’s net debt was around $2.9 billion, down roughly 31.9% sequentially.
FY23 Results
In 2023, MT reported revenues totaling $68.27 billion, indicating a 14.5% decline from 2022, primarily attributed to lower average steel selling prices despite stable shipments. ArcelorMittal reported a net income of $919 million in 2023, a notable decrease from $9.3 billion in 2022. The adjusted net income for 2023 was $4.9 billion compared with $10.6 billion in 2022.
ArcelorMittal's earnings per share in 2023 amounted to $1.09 compared with $10.21 in 2022. Adjusted earnings per share for 2023 were $5.78, down from $11.65 in 2022.
Outlook
In 2024, ArcelorMittal anticipates a rebound in global steel demand, particularly evident as the destocking phase nears its conclusion. Despite ongoing challenges, such as modest real demand growth and economic uncertainties, apparent steel consumption excluding China is expected to increase in the range of 3-4% compared with the previous year.
The company forecasts varied growth trajectories across key regions. The United States and Europe are poised for improved apparent steel consumption, while in Brazil, it anticipates a gradual rebound. India remains a strong performer with a robust growth projection, while China faces economic headwinds with continued softness in real estate.
ArcelorMittal remains optimistic about the long-term steel demand outlook, emphasizing its commitment to growth alongside capital returns. Capital expenditures are expected to range between $4.5 billion and $5 billion in 2024, including strategic growth investments of $1.4 billion to $1.5 billion.
Price Performance
Shares of ArcelorMittal have lost 0.4% in the past year against the industry’s 13.7% rise.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
ArcelorMittal currently carries a Zacks Rank #3 (Hold).
Cameco has a projected earnings growth rate of 188% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised 12.5% upward in the past 60 days. The stock has gained around 53.1% in a year.
The consensus estimate for CRS’ current fiscal year earnings is pegged at $3.97 per share, indicating a year-over-year surge of 248.3%. CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 27.3% in the past year.
The consensus estimate for CLF’s current fiscal year earnings is pegged at $2.27 per share, indicating a year-over-year rise of 112%. The Zacks Consensus Estimate for CLF’s current-year earnings has been revised 4.6% upward in the past 60 days. CLF beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 24.7%.
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ArcelorMittal's (MT) Q4 Earnings Beat Estimates, Sales Miss
ArcelorMittal (MT - Free Report) recorded an adjusted net income of $982 million or $1.18 per share in fourth-quarter 2023 compared with $1.19 billion or $1.37 per share in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate of a loss of $2.08 per share.
Total sales fell around 14% year over year to $14,552 million in the quarter. The figure missed the consensus estimate of $14,950.5 million. The downside was primarily due to a decline in average steel selling prices.
Total steel shipments rose 5.5% year over year to 13.3 million metric tons in the reported quarter. The figure was above our estimate of 11.2 million metric tons.
ArcelorMittal Price, Consensus and EPS Surprise
ArcelorMittal price-consensus-eps-surprise-chart | ArcelorMittal Quote
Segment Review
NAFTA: Sales were flat year over year at $2.94 billion in the reported quarter. Crude steel production increased 8% year over year to 2,185 million metric tons. Steel shipments increased around 10.7% year over year to 2,590 million metric tons, higher than our estimate of 2,116 million metric tons. The average steel selling price declined 7% to $948 per ton.
Brazil: Sales decreased around 6.4% year over year to $2.71 billion. Crude steel production rose 27% year over year to 3,533 million metric tons. Shipments increased 35% year over year to 3,562 million metric tons, higher than our estimate of 2,635 million metric tons. Average steel selling prices fell 17.7% to $852 per ton.
Europe: Sales declined around 20.7% year over year to $7.99 billion. Crude steel production fell roughly 4.7% year over year to 6,630 million metric tons in the reported quarter. Shipments declined around 4% year over year to 6,507 million metric tons, lower than our estimate of 6,147 million metric tons. The average steel selling price declined roughly 10% year over year to $975 per ton.
Asia Africa and CIS (ACIS): Sales fell around 2.4% year over year to $1.2 billion. Crude steel production totaled 1,351 million metric tons, down about 3% year over year. Shipments decreased 6.4% year over year to around 1,323 million metric tons, higher than our estimate of 1,190 million metric tons. Average selling prices dropped about 6% year over year to $677 per ton.
Mining: Sales increased 6.7% year over year to $764 million. Iron ore production totaled 6.2 million metric tons, down around 17% from the year-ago quarter’s levels. Iron ore shipments were down 11.6% year over year to 6.1 million metric tons.
Financials
In the reported quarter, net cash provided by operating activities was $3,328 million compared with $3,634 million in the year-ago quarter. The company’s net debt was around $2.9 billion, down roughly 31.9% sequentially.
FY23 Results
In 2023, MT reported revenues totaling $68.27 billion, indicating a 14.5% decline from 2022, primarily attributed to lower average steel selling prices despite stable shipments. ArcelorMittal reported a net income of $919 million in 2023, a notable decrease from $9.3 billion in 2022. The adjusted net income for 2023 was $4.9 billion compared with $10.6 billion in 2022.
ArcelorMittal's earnings per share in 2023 amounted to $1.09 compared with $10.21 in 2022. Adjusted earnings per share for 2023 were $5.78, down from $11.65 in 2022.
Outlook
In 2024, ArcelorMittal anticipates a rebound in global steel demand, particularly evident as the destocking phase nears its conclusion. Despite ongoing challenges, such as modest real demand growth and economic uncertainties, apparent steel consumption excluding China is expected to increase in the range of 3-4% compared with the previous year.
The company forecasts varied growth trajectories across key regions. The United States and Europe are poised for improved apparent steel consumption, while in Brazil, it anticipates a gradual rebound. India remains a strong performer with a robust growth projection, while China faces economic headwinds with continued softness in real estate.
ArcelorMittal remains optimistic about the long-term steel demand outlook, emphasizing its commitment to growth alongside capital returns. Capital expenditures are expected to range between $4.5 billion and $5 billion in 2024, including strategic growth investments of $1.4 billion to $1.5 billion.
Price Performance
Shares of ArcelorMittal have lost 0.4% in the past year against the industry’s 13.7% rise.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
ArcelorMittal currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Cameco Corporation (CCJ - Free Report) and Carpenter Technology Corporation (CRS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy), and Cleveland-Cliffs Inc. (CLF - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cameco has a projected earnings growth rate of 188% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised 12.5% upward in the past 60 days. The stock has gained around 53.1% in a year.
The consensus estimate for CRS’ current fiscal year earnings is pegged at $3.97 per share, indicating a year-over-year surge of 248.3%. CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 27.3% in the past year.
The consensus estimate for CLF’s current fiscal year earnings is pegged at $2.27 per share, indicating a year-over-year rise of 112%. The Zacks Consensus Estimate for CLF’s current-year earnings has been revised 4.6% upward in the past 60 days. CLF beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 24.7%.