Steel giant ArcelorMittal ( MT )
announced that it has agreed to sell its 15% stake in one of its
iron ore operations, ArcelorMittal Mines Canada, for $1.1 billion.
The company said that it will sell the stake to a consortium led by
South Korean steelmaker Posco and Taiwan-listed China Steel
Under the agreement, ArcelorMittal, Posco and China Steel Corp
will jointly own ArcelorMittal's Labrador Trough iron ore mining
and infrastructure assets and will enter into long-term iron ore
supply agreements. The transaction is subject to the approval of
the Taiwanese Government and is expected to close by mid-2013.
The joint venture is consistent with ArcelorMittal's strategy of
establishing strategic relationships with key customers and expand
its mining business.
ArcelorMittal, in November 2012, released its third-quarter 2012
results. The company posted a net loss of $709 million or 46 cents
per share in the quarter compared with a net income of $659 million
or 19 cents per share a year ago. The bottom line was hurt by the
challenging economic conditions, including the slowdown in China as
well as lower steel pricing and shipments.
The company's adjusted loss of 31 cents a share missed the Zacks
Consensus Estimate of earnings of 6 cents per share. The adjusted
loss excludes one-time items including impairment and restructuring
Revenues declined 18.5% year over year to $19,723 million,
trailing the Zacks Consensus Estimate of $21,189 million. Sales
also declined 12.3% on a sequential basis, due to lower steel
shipment volumes and lower average steel selling prices. Shipments
declined 5.7% to 19.9 million metric tons in the quarter.
We currently have a long-term Underperform recommendation on
ArcelorMittal. The company, which competes with U.S. Steel
Corp. ( X ) and Tata Steel Limited, maintains a Zacks #5
Rank (Strong Sell).ARCELOR MITTAL (MT): Free Stock Analysis ReportUTD STATES STL (X): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment