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ArcelorMittal’s 3Q17 Earnings: What You Need to Know

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ArcelorMittal’s 3Q17 Earnings: What You Need to Know PART 3 OF 3

Analyzing ArcelorMittal’s Earnings in 3Q17

Earnings analysis

In this part, we’ll look at ArcelorMittal’s (MT) 3Q17 EBITDA (earnings before interest, tax, depreciation, and amortization), net income, and free cash flows. ArcelorMittal reported an adjusted EBITDA of $1.9 billion in 3Q17. The company posted an EBITDA of $2.1 billion in 2Q17 and $1.9 billion in 3Q16. ArcelorMittal generated a net income of $1.2 billion during the quarter. It posted net income of $1.3 billion in 2Q17 and $0.7 billion in 3Q16.

Analyzing ArcelorMittal&#8217;s Earnings in 3Q17

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ArcelorMittal posted free cash flows of $126 million in 3Q17. The company’s lower cash flows could be due to its higher working capital investment. ArcelorMittal raised its 2017 working capital investment guidance to $2 billion from the previous guidance of $1.5 billion.

Key drivers

ArcelorMittal’s NAFTA segment posted an EBITDA of $381 million in 3Q17—compared to $506 million in 2Q17 and $566 million in 3Q16. While ArcelorMittal’s 3Q17 NAFTA shipments were higher compared to 2Q17, the margin compression had a negative impact on the segment’s 3Q17 performance. ArcelorMittal’s NAFTA per-ton EBITDA fell to $67 in 3Q17—compared to $93 in 2Q17. US-based steel producers including U.S. Steel Corporation (X), AK Steel (AKS), and Nucor (NUE) also reported margin compression in 3Q17.

ArcelorMittal’s Europe (VGK) EBITDA fell to $848 million in 3Q17 from $942 million in 2Q17. The company attributed the lower Europe profits to fewer shipments and higher input costs. ArcelorMittal’s 3Q17 Brazil EBITDA was similar to the sequential quarter, while its ACIS (Africa and Commonwealth of Independent States) segment reported sequentially higher EBITDA in the quarter. The Mining segment’s EBITDA also improved to $341 million in 3Q17 from $319 million in 2Q17 and $204 million in 3Q16.

You can visit Market Realist’s Steel page for post-earnings analysis of other steel companies.

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