ArcelorMittal (MT), the world’s largest steel producer, released its second-quarter earnings on August 1. U.S. Steel (X) is scheduled to release its earnings after the close of US markets today. AK Steel (AKS), which posted its Q2 2018 earnings on July 30 after markets closed, saw a selling spree yesterday after earnings missed consensus estimates.
ArcelorMittal reported revenues of $19.9 billion in Q2 2018 as compared to $19.2 billion in the sequential quarter. The company’s operating income also jumped from $1.57 billion to $2.36 billion during this period. According to Bloomberg, ArcelorMittal’s profits jumped to a seven-year high in the quarter. A mix of higher steel prices and margin expansion boosted ArcelorMittal’s Q2 2018 earnings.
ArcelorMittal’s second-quarter earnings were better than expected. Previously, Nucor (NUE) and Steel Dynamics (STLD) also reported better-than-expected earnings while AK Steel’s earnings missed consensus estimates.
ArcelorMittal sounded upbeat on its earnings and outlook. Lakshmi Mittal, ArcelorMittal’s CEO, said in the company’s earnings release, “This is an encouraging set of results reflecting the structural improvements in both the global steel industry due to supply reform dynamics and within ArcelorMittal as a result of Action 2020.”
ArcelorMittal also raised its projection for global apparent steel consumption in 2018 from 1.5%–2.5% to 2%–3%. Despite the noise about trade tensions and the perceived slowdown in China, steel prices have been strong globally even in China. We’ll follow up with a detailed analysis of ArcelorMittal’s earnings.