What To Expect From ArcelorMittal’s 2017 Q4 Results

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Arcelor Mittal

ArcelorMittal (NYSE: MT) will announce its Q4 2017 and full year 2017 earnings results and conduct a conference call with analysts on January 31. The graph below summarizes our expectations from the upcoming results. These have been created using our new interactive platform. Strong growth is expected to be realized from the company’s European & Brazilian division, with the Action 2020 plan to significantly boost operational efficiency.

Improving demand conditions in ArcelorMittal’s major steel markets should translate into a recovery in steel shipments in Q4 2017. We expect the shipment volume from the U.S. division not to display a  significant sequential growth due to the prevalent large share of steel imports in the economy in 2017, despite taking into account the positive impact of Chinese steel production curtailments.

The company’s European and Brazilian segments, on the other hand, are expected to display a significant sequential and Year-on-Year (Y-o-Y) growth driven by an improving economic condition in these economies. Brazil displayed a revival from its economic depression in 2017, with significant signs of revival in Q4. The economy grew by approximately 1.1% in 2017, which is expected to translate into higher steel shipment volume from this region.

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The European division is also expected to benefit from a recovering economy coupled with lower steel imports into the union. The protectionist move by Brussels has especially helped reduce the share of cheap Chinese steel imports, which was further supported by China’s decision to curb its steel output.

Apart from improved business conditions, savings realized under ArcelorMittal’s Action Plan 2020 will help boost the company’s earnings and enhance its operational performance. Action Plan 2020 is ArcelorMittal’s road map for realizing $3 billion worth of benefits from 2016-2020 through measures such as productivity improvement initiatives and focusing on a higher value-added product mix. These factors are expected to facilitate ArcelorMittal to deliver a strong quarter.

We have a price estimate of $28 for ArcelorMittal which is below the market price.

Have more questions about ArcelorMittal? See the links below.

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such communication sparks thinking and encourages readers to comment and ask questions in the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for ArcelorMittal

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