On Apr 14, we issued an updated research report on steel maker
). While the company's efforts to cut debt, reduce costs and
increase steel-making capacity are encouraging, weak steel
industry fundamentals and a tough pricing environment remain
The steel giant posted narrower loss in the fourth quarter of
2013, reported on Feb 7, thanks to lower impairment charges.
Adjusted loss, however, was higher than the Zacks Consensus
Estimate. Revenues rose year over year but missed expectations.
ArcelorMittal has missed earnings estimates in three of the
trailing four quarters by big margins with an average negative
surprise of roughly 234%. Estimates for the company have declined
over the past month. Zacks Consensus Estimates for 2014 and 2015
have decreased 6.5% and 1.4%, respectively, over the same period.
ArcelorMittal remains exposed to challenging conditions in
Europe, volatility in steel pricing and tough competition.
Increased domestic imports, production ramp ups by peers and
higher Chinese production have led to oversupply in the steel
industry, which in turn, is causing a decline in steel prices.
Moreover, demand for steel still remains weak in Europe. Steel
demand fell in Europe in 2013 and is currently roughly 30% below
ArcelorMittal is still seeing soft demand across some of the key
end-use markets. The company's Flat Carbon Europe division
remains under pressure due to lower average steel selling prices.
ArcelorMittal has closed some its operations in Europe due to
slack demand and weak economic conditions. Recovery in the demand
environment is expected to be sluggish in the region this year.
Other Stocks to Consider
Other companies in the steel and related industries with
favorable Zacks Rank include
Century Aluminum Co.
). While NN holds a Zacks Rank #1 (Strong Buy), both Century
Aluminum and NSK retain a Zacks Rank #2 (Buy).
CENTURY ALUM CO (CENX): Free Stock Analysis
ARCELOR MITTAL (MT): Free Stock Analysis
NN INC (NNBR): Free Stock Analysis Report
NSK LTD -UN ADR (NPSKY): Get Free Report
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