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ArcelorMittal Posts a Net Loss of $205 Million in 1Q15

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ArcelorMittal 1Q earnings

ArcelorMittal (MT) released its 1Q earnings on May 7, 2015. It posted a net loss of $205 million in 1Q 2015 compared to a loss of $728 million in 1Q 2014. The results came in lower than Wall Street expectations and met with a negative reaction on Wall Street.

In this series, we’ll analyze ArcelorMittal’s 1Q earnings in detail. We’ll discuss the key takeaways from an investor’s perspective. We’ll also look at the performance of ArcelorMittal’s different business segments. ArcelorMittal is the biggest steel maker globally, and it’s among the top five iron ore miners.

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Earnings disappoint

The chart above shows a snapshot of ArcelorMittal’s 1Q earnings. As you can see, the company’s 1Q 2015 net sales declined 13% year-over-year. The decline in net sales was due to a 15.5% decline in average selling prices. ArcelorMittal’s global shipments, however, increased 3% year-over-year.

Steel prices have corrected steeply in the last six months. Other steel companies, like Schnitzer Steel (SCHN), also reported lower average steel selling prices in the quarter. SCHN currently forms 1.48% of the SPDR S&P Metals and Mining ETF (XME). Carpenter Technology (CRS) forms 3.5% of XME.

Lower profits

Lower steel prices took a toll on MT’s 1Q earnings. Its earnings before interest, taxes, depreciation, and amortization (or EBITDA) declined ~22% on a year-over-year basis.

Europe (VGK) is the largest market for ArcelorMittal, and it accounts for almost half of its revenues. In the next part of this series, we’ll discuss how MT’s European operations fared in 1Q 2015.

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