ArcelorMittal (MT) Gears Up for Q3 Earnings: What's in Store?

www.investing.com/analysis/arcelormittal-mt-gears-up-for-q3-earnings-whats-in-store-200607642

By Zacks Investment Research | Nov 08, 2021 07:08AM ET

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ArcelorMittal (NYSE:MT) MT will release third-quarter 2021 results before the bell on Nov 11. The company’s results are expected to have benefited from strong end-market demand and higher average steel selling prices.

The steel giant beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of 49.3%, on average. It posted an earnings surprise of 28.2% in the last reported quarter.

Shares of ArcelorMittal have shot up 104.7% in the past year compared with 69% rise of the industry.

Zacks Investment Research

Image Source: Zacks Investment Research

Let’s see how things are shaping up for this announcement.

What do the Estimates Say?

The Zacks Consensus Estimate for third-quarter sales for ArcelorMittal is currently pegged at $22,440 million, which suggests a rise of 69.2% year over year.

The Zacks Consensus Estimate for revenues in the NAFTA segment is currently pegged at $3,803 million, which calls for a rise of 14.2% on a year-over-year comparison basis. The consensus estimate for average steel selling price stands at $1,179 per ton, reflecting a year-over-year rise of 68.2%.

Moreover, the consensus mark for revenues in the Brazil segment is currently pegged at $3,869 million, which calls for a year-over-year rise of 141.4%. The same for average steel selling price stands at $1,262 per ton, reflecting a year-over-year increase of 101.9%.

The consensus mark for revenues in the Europe segment is currently pegged at $12,096 million, which suggests a year-over-year rise of 72.5%. The same for average steel selling price stands at $968 per ton, reflecting a year-over-year rise of 79.4%.

The Zacks Consensus Estimate for revenues in the Asia Africa and CIS segment is currently pegged at $2,849 million, which calls for an increase of 103.5% year over year. The consensus mark for average steel selling price is pinned at $820 per ton, reflecting a year-over-year increase of 76.3%.

The consensus mark for revenues in the Mining segment is currently pegged at $1,296 million, which reflects a year-over-year rise of 8%.

Some Factors at Play

ArcelorMittal’s third-quarter results are likely to have benefited from higher end-market demand. It is seeing a strong rebound in demand following the easing of lockdown measures. ArcelorMittal, in its second-quarter call, raised its outlook for global apparent steel consumption for 2021 as it expects demand to further improve in the second half.

The company’s cost-reduction initiatives will also likely to have supported profitability in the quarter to be reported. It remains focused on maintaining a competitive cost advantage.

The company is also likely to have gained from higher steel prices in the third quarter. Its average steel selling prices went up around 61% year over year in the second quarter of 2021 and boosted bottom line. The momentum is expected to have continued in the third quarter. Strong end-market demand, tight supply and higher raw material costs are driving steel prices. Benefits of higher steel prices are expected to reflect on the company’s bottom line in the September quarter.

ArcelorMittal Price and EPS Surprise

ArcelorMittal price-eps-surprise | ArcelorMittal Quote

Zacks Model

Our proven model does not conclusively predict an earnings beat for ArcelorMittal this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for ArcelorMittal is 0.00%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at $4.17. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: ArcelorMittal currently carries a Zacks Rank #3.

Stocks That Warrant a Look

Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Sociedad Quimica y Minera de Chile S.A. SQM, scheduled to release earnings on Nov 17, has an Earnings ESP of +0.33% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tetra Tech (NASDAQ:TTEK), Inc. TTEK, scheduled to release earnings on Nov 17, has an Earnings ESP of +0.50% and carries a Zacks Rank #2.

Osisko Gold Royalties (NYSE:OR) Ltd OR, scheduled to release earnings on Nov 9, has an Earnings ESP of +1.19% and carries a Zacks Rank #3.

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ArcelorMittal (MT) Gears Up for Q3 Earnings: What's in Store?

What do the Estimates Say?

Some Factors at Play

ArcelorMittal Price and EPS Surprise

Zacks Model

Stocks That Warrant a Look

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