By Geoffrey Smith
Investing.com -- ArcelorMittal SA (AS: MT ), the world’s second-largest steelmaker, said its profits dropped in the third quarter, hurt by both high energy costs and weakening demand.
While its core underlying earnings were better than consensus forecasts, the Luxembourg-based company said it expects the squeeze to worsen in the current quarter, as the relief from falling energy costs is more than offset by a faster drop in selling prices.
Earnings before interest, taxes, depreciation and amortization fell by more than half from a year earlier to $2.66 billion, some 10% ahead of consensus, but net income fell by nearly three-quarters to $993M. Earnings per share of $1.11 were down from $3.63 a year earlier. Sales, meanwhile, fell 6% to $19B.
CEO Aditya Mittal said "seasonally lower shipments, a reduction in exceptional price levels, destocking and higher energy costs combined to put profits under pressure," adding that the company had responded by cutting its capacity where costs were highest, notably in Europe, where it cut its gas demand by 30%. Overall steel shipments were down 6.9% from a year earlier at 13.6 million tons.
"The short-term outlook for the industry remains uncertain and caution is appropriate," Mittal added, although he argued that the company is strong enough to "face the future with confidence."
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.