ArcelorMittal Stumbles on China Slowdown

Industrials

Published: October 31, 2012 10:45 am

Last Updated: October 31, 2012 10:52 am

ArcelorMittal (NYSE: MT) reported third-quarter 2012 results before markets opened this morning. For the quarter, the mining and steel making giant posted a net loss of $0.46 per share on revenues of $19.72 billion. In the same period a year ago, the company reported earnings per share (EPS) of $0.43 on revenues of $24.21 billion. Third-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.15 and $21.19 billion in revenues.

For investors, the really bad news is that ArcelorMittal’s board proposes to cut the annual dividend from $0.75 a share to $0.20 a share.

The company’s CEO said:

The already fragile global economy was further impacted in the third quarter of 2012 by the slowdown in China. This resulted in very challenging operating conditions for ArcelorMittal, which are expected to continue in the fourth quarter. Against this backdrop, the Company is focussed on delivering its plan of asset optimization, net debt reduction and productivity and efficiency improvements.

The company also provided some additional and revised guidance. Full-year EBITDA is now forecast at $7 billion, iron ore shipments will rise 10% compared with last year, and capex is expected to total $4.5 billion. The guidance on iron ore shipments and capex is unchanged from last quarter.

ArcelorMittal’s shares are down 1.4% at $15.23, in a 52-week range of $13.28 to $23.62. The consensus target price for the shares was around $21.20 before today’s report.

Paul Ausick

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