) posted a net loss of $4 billion or $2.58 per share in the
fourth quarter of 2012 compared with a net loss of $1 billion or
65 cents per share a year ago. The bottom line was hurt by hefty
charges and challenging economic conditions in Europe where the
demand for steel dropped 8.8% last year.
Adjusted loss of $1.47 cents a share for the quarter exceeded
the Zacks Consensus Estimate of a loss of 15 cents per share. The
adjusted loss excludes $4.8 billion of goodwill impairment
charges associated with the company's European businesses and
$192 million of restructuring charges.
For full-year 2012, the company posted a net loss of $2.41 per
share compared with an income of $1.46 in 2011. Adjusted loss was
$1.05 per share, missing the Zacks Consensus Estimate of a loss
of 4 cents per share.
Revenues declined 14% year over year to $19,309 million in the
reported quarter, trailing the Zacks Consensus Estimate of
$20,168 million. Sales also declined 2.1% on a sequential basis
due to lower average steel selling prices. Shipments declined
2.9% to 20 million metric tons in the quarter.
For the full year, sales were $84,213 million, up 10.4% year
over year, but missed the Zacks Consensus Estimate of $84,902
Flat Carbon Americas:
Higher production in South America, after the reline of a blast
furnace in Tubarao, Brazil, led to a 3.6% sequential increase in
steel production to 5.9 million tons in the fourth quarter.
However, production declined 1.3% on a year-over-year basis.
Average selling prices went down 8.2% year over year to $797 per
Sales went down 6.9% annually and 3.2% sequentially to $4,683
million due to lower steel selling prices in North America and
weakening slab pricing in Brazil and Mexico.
Flat Carbon Europe:
Revenues slid 12.3% year over year and were almost flat
sequentially at $6,142 million in the quarter as lower average
steel selling prices offset the increase in shipment volumes.
Steel production fell 3.7% from last year and 5.1% sequentially
due to reduced inventory levels and output was aligned with local
market levels. Average selling prices went down 11.2% from last
year to $847 per ton.
Long Carbon Americas and Europe:
Revenues from the segment dropped 11.9% year over year and were
almost flat sequentially at $5,232 million. Sales were affected
by a decrease in average steel selling prices. Average selling
prices fell around 5.4% year over year to $857 per ton.
Production declined 4.3% on a year over year basis and 8.3%
sequentially, due to lower market demand as well as operational
Asia Africa and CIS (AACIS):
Sales slipped 22.1% from the year-ago quarter and 13.3% from the
previous quarter to $2,130 million due to lower steel shipments
and average steel selling prices. Average selling price was $611
per ton compared with $713 per ton in the year-ago quarter.
Revenues declined almost 20.9% year over year but were up 3.7% on
a sequential basis to $3,855 million. The sequential improvement
reflected higher steel shipment volumes. Average steel selling
prices declined 12% year over year to $834 per ton.
Iron ore production plunged 7.3% year over year and 2.1% from the
previous quarter to 14 million tons in the reported quarter. Coal
production declined 9.1% year over year and was flat sequentially
at 2 million tons.
Cash and cash equivalents (including restricted cash) amounted
to $4.5 billion as of Dec 31, 2012, compared with $3.9 billion as
of Dec 31, 2011. The company's net debt decreased by $1.4 billion
to $21.8 billion as of Dec 31, 2012, as compared with $23.2
billion as of Sept 30, 2012, driven by positive operating cash
flow and recovery of subsidiary financing.
The company announced during third-quarter 2012 that it will
reduce the annual dividend payment to 20 cents per share in 2013
from 75 cents per share in 2012. The reduced dividend will be
paid in Jul 2013 once approved by the shareholders at the next
annual general meeting in May 2013.
The company anticipates steel shipments to increase by
approximately 2%-3% from last year in 2013. Capital expenditure
has been projected to be approximately $3.5 billion for the year.
Also, the company expects EBITDA to be higher in 2013 than
About $5 billion of cash receipts is expected from the capital
raised in Jan 2013 and the announced sale of a 15% stake in
ArcelorMittal Mines Canada expansion is expected to reduce net
debt to approximately $17 billion by Jun 30, 2013.
ArcelorMittal remains affected by the challenging economic
conditions in Europe. It is also exposed to volatility in steel
pricing and tough competition and has significant debt. The
company is highly focused on reducing debt, lowering costs and
ArcelorMittalcurrently maintains a Zacks Rank #3 (Hold).
Other companies in the steel industry with favorable Zacks
Gibraltar Industries Inc.
). All of them hold a Zacks Rank #2 (Buy).
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GIBRALTAR INDUS (ROCK): Free Stock Analysis
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