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ArcelorMittal (MT - Free Report) recorded profits of $4,125 million or $4.28 per share in the first quarter of 2022, compared with $2,285 million or $1.94 in the year-ago quarter.
Barring one-time items, earnings per share came in at $4.27, beating the Zacks Consensus Estimate of $3.25.
Total sales increased around 34.8% year over year to $21,836 million in the quarter. The figure surpassed the Zacks Consensus Estimate of $21,111 million. Sales were driven by a significant rally in average steel selling prices that offset lower iron ore prices.
Total steel shipments declined 7.3% year over year to 15.3 million metric tons in the reported quarter.
NAFTA: Sales increased roughly 48.3% year over year to $3.8 billion in the reported quarter. Crude steel production declined roughly 4.5% year over year to 2 million metric tons. Steel shipments fell around 2.2% year over year to 2.5 million metric tons. The average steel selling price increased 55.5% year over year to $1,322 per ton.
Brazil: Sales increased around 32.8% year over year to $3.4 billion. Crude steel production was flat year over year to 3 million metric tons. Shipments increased 5.9% year over year to 3 million metric tons. The average steel selling price rose 24.1% year over year to $1,039 per ton.
Europe: Sales increased around 39.4% year over year to $13 billion. Crude steel production fell roughly 10.4% year over year to 8.7 million metric tons in the reported quarter. Shipments fell around 7.5% year over year to 8.3 million metric tons. The average steel selling price went up roughly 49.8% year over year to $1,218 per ton.
Asia Africa and CIS (ACIS): Sales fell around 1.9% year over year to $2.1 billion. Crude steel production totaled 2.5 million metric tons, down about 8.6% year over year. Shipments declined 20.2% year over year to around 2.1 million metric tons. Average selling prices rose around 32% year over year to $855 per ton.
Mining: Sales fell 20.9% year over year to $933 million. Iron ore production totaled 6.9 million metric tons, down around 5.5% from the year-ago quarter’s levels. Iron ore shipments declined 9.5% year over year to 6.7 million metric tons.
Financials
At the end of the quarter, ArcelorMittal had cash and cash equivalents of around $5.6 billion, up around 1.8% year over year. The company’s long-term debt was $6.3 billion, down roughly 26.2% on a year-over-year basis.
Net cash from operating activities rose 104% year over year to $2,034 million for the first quarter.
ArcelorMittal completed the $1 billion share buyback program on Apr 26, 2022, which it had announced on Feb 11, 2022. It announced an increase in its 2022 buyback program to $2 billion, of which $1 billion has been completed.
Outlook
ArcelorMittal now envisions global apparent steel consumption (“ASC”) to decline slightly by up to 1% in 2022, compared with the previous guidance of an increase by up to 1%. The longer-term fundamental outlook for steel is positive. China is also focusing on decarbonization and removal of VAT rebates on steel exports. Actions taken by governments to protect against the threats of unfair trade are also encouraging.
The capex is forecast to be $4.5 billion in 2022.
Price Performance
Shares of ArcelorMittal have declined 14.8% in the past year compared with a 11.4% fall of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
ArcelorMittal currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Nutrien Ltd. (NTR - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Allegheny Technologies Incorporated (ATI - Free Report) .
Nutrien has a projected earnings growth rate of 157.9% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 36.6% upward in the past 60 days.
Nutrien’s earnings beat the Zacks Consensus Estimate in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 5.9%, on average. NTR has rallied around 68.1% in a year and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AdvanSix has a projected earnings growth rate of 63.4% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 39.4% upward in the past 60 days.
AdvanSix’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 23.6%. ASIX has surged 50.1% in a year. The company sports a Zacks Rank #1.
Allegheny, currently sporting a Zacks Rank #1, has an expected earnings growth rate of 707.7% for the current year. The Zacks Consensus Estimate for ATI's earnings for the current year has been revised 6.1% upward in the past 60 days.
Allegheny’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 127.2%. ATI has rallied around 12.2% over a year.
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ArcelorMittal's (MT) Q1 Earnings & Revenues Surpass Estimates
ArcelorMittal (MT - Free Report) recorded profits of $4,125 million or $4.28 per share in the first quarter of 2022, compared with $2,285 million or $1.94 in the year-ago quarter.
Barring one-time items, earnings per share came in at $4.27, beating the Zacks Consensus Estimate of $3.25.
Total sales increased around 34.8% year over year to $21,836 million in the quarter. The figure surpassed the Zacks Consensus Estimate of $21,111 million. Sales were driven by a significant rally in average steel selling prices that offset lower iron ore prices.
Total steel shipments declined 7.3% year over year to 15.3 million metric tons in the reported quarter.
ArcelorMittal Price, Consensus and EPS Surprise
ArcelorMittal price-consensus-eps-surprise-chart | ArcelorMittal Quote
Segment Review
NAFTA: Sales increased roughly 48.3% year over year to $3.8 billion in the reported quarter. Crude steel production declined roughly 4.5% year over year to 2 million metric tons. Steel shipments fell around 2.2% year over year to 2.5 million metric tons. The average steel selling price increased 55.5% year over year to $1,322 per ton.
Brazil: Sales increased around 32.8% year over year to $3.4 billion. Crude steel production was flat year over year to 3 million metric tons. Shipments increased 5.9% year over year to 3 million metric tons. The average steel selling price rose 24.1% year over year to $1,039 per ton.
Europe: Sales increased around 39.4% year over year to $13 billion. Crude steel production fell roughly 10.4% year over year to 8.7 million metric tons in the reported quarter. Shipments fell around 7.5% year over year to 8.3 million metric tons. The average steel selling price went up roughly 49.8% year over year to $1,218 per ton.
Asia Africa and CIS (ACIS): Sales fell around 1.9% year over year to $2.1 billion. Crude steel production totaled 2.5 million metric tons, down about 8.6% year over year. Shipments declined 20.2% year over year to around 2.1 million metric tons. Average selling prices rose around 32% year over year to $855 per ton.
Mining: Sales fell 20.9% year over year to $933 million. Iron ore production totaled 6.9 million metric tons, down around 5.5% from the year-ago quarter’s levels. Iron ore shipments declined 9.5% year over year to 6.7 million metric tons.
Financials
At the end of the quarter, ArcelorMittal had cash and cash equivalents of around $5.6 billion, up around 1.8% year over year. The company’s long-term debt was $6.3 billion, down roughly 26.2% on a year-over-year basis.
Net cash from operating activities rose 104% year over year to $2,034 million for the first quarter.
ArcelorMittal completed the $1 billion share buyback program on Apr 26, 2022, which it had announced on Feb 11, 2022. It announced an increase in its 2022 buyback program to $2 billion, of which $1 billion has been completed.
Outlook
ArcelorMittal now envisions global apparent steel consumption (“ASC”) to decline slightly by up to 1% in 2022, compared with the previous guidance of an increase by up to 1%. The longer-term fundamental outlook for steel is positive. China is also focusing on decarbonization and removal of VAT rebates on steel exports. Actions taken by governments to protect against the threats of unfair trade are also encouraging.
The capex is forecast to be $4.5 billion in 2022.
Price Performance
Shares of ArcelorMittal have declined 14.8% in the past year compared with a 11.4% fall of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
ArcelorMittal currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Nutrien Ltd. (NTR - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Allegheny Technologies Incorporated (ATI - Free Report) .
Nutrien has a projected earnings growth rate of 157.9% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 36.6% upward in the past 60 days.
Nutrien’s earnings beat the Zacks Consensus Estimate in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 5.9%, on average. NTR has rallied around 68.1% in a year and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AdvanSix has a projected earnings growth rate of 63.4% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 39.4% upward in the past 60 days.
AdvanSix’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 23.6%. ASIX has surged 50.1% in a year. The company sports a Zacks Rank #1.
Allegheny, currently sporting a Zacks Rank #1, has an expected earnings growth rate of 707.7% for the current year. The Zacks Consensus Estimate for ATI's earnings for the current year has been revised 6.1% upward in the past 60 days.
Allegheny’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 127.2%. ATI has rallied around 12.2% over a year.