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What to Look For in ArcelorMittal’s 4Q16 Earnings Call

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ArcelorMittal’s 4Q16 earnings call

Previously, we looked at analysts’ estimates for ArcelorMittal’s (MT) 4Q16 earnings. In this part, we’ll analyze the key updates that the markets are waiting for in the company’s 4Q16 earnings call.

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EBITDA guidance

While Nucor (NUE) and Steel Dynamics (STLD) provide quarterly earnings guidance, United States Steel (X) and ArcelorMittal give annual EBITDA (earnings before interest, tax, depreciation, and amortization) guidance. During ArcelorMittal’s 4Q16 earnings call, the markets will be waiting for the company’s fiscal 2017 guidance.

Coking coal contracts

Coking coal prices were quite volatile last year and could impact the annual contract pricing for steel companies. During its 3Q16 earnings call, MT pointed out that the company buys 5.0 million metric tons of coking coal under annual contracts in the United States (IXIC) (COMP).

Notably, higher 2017 coal contract pricing was also a concern for United States Steel investors. But the company managed to allay market fears by saying, “Our delivered coal cost is expected to increase by $19/ton in 2017 compared to 2016 coal costs.”

During MT’s 4Q16 earnings call, the markets will be eager to find out what the company is expecting for its annual coking coal contracts.

Automotive contracts

The markets could also look for something about ArcelorMittal’s annual automotive contracts. MT is the largest steel supplier to the automotive industry. AK Steel (AKS) is also a major steel supplier, but its management commentary on automotive contract pricing wasn’t very encouraging. It will be interesting to hear ArcelorMittal’s take on how its automotive contracts have progressed.

In the next and final part of this series, we’ll see how analysts are rating ArcelorMittal before its 4Q16 earnings.

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