Robust Growth Across Key Markets Are Likely To Drive ArcelorMittal’s Performance In Q2
ArcelorMittal (NYSE: MT) will release its second-quarter results on 1st August 2018 and conduct a conference call with analysts the same day. Consensus market estimates expect the company to post an adj-EPS of $1.57 vis-à-vis an adj-EPS of $1.29 reported in the same period last year. Additionally, the company is expected to report an EBITDA of $2.85 billion in Q2 as per consensus estimates, almost 36% higher year-on-year (y-o-y). Prevalent favorable market conditions across ArcelorMittal’s key markets are expected to translate into stronger results for the company in its second quarter. However, the company might experience some negative repercussions of the recently imposed trade tariffs.
ArcelorMittal is expected to benefit from a robust demand environment across all its markets throughout 2018. Per the company’s estimates, the global steel demand (ex-China) is expected to grow between 3%-4% in 2018. Strong growth is especially expected from the company’s Commonwealth of Independent States (CIS) and Brazilian markets, as these economies continue to recover. Furthermore, the recently imposed steel tariffs in the U.S. are expected to remain beneficial for the company’s North American operations both in terms of volume and pricing. Nucor, one of the largest steel players in the U.S. reported a 17% year-on-year (y-o-y) increase in its average realized steel prices for the quarter broadly as a consequence of these tariffs and we expect to witness a similar double-digit growth in realized steel prices from ArcelorMittal’s North American operations.
However, the same tariffs and the consequent trade war might result in some detrimental impact on the company’s most important European operations. The increased tariffs in the U.S. might have shifted some of the cheap imports into the EU, which would have a negative impact on ArcelorMittal’s European shipments and pricing. We wait to see the implications of the same through the company’s second-quarter results.
Nevertheless, the company’s significantly lower debt levels are expected to improve the company’s overall profitability. Our key expectations for the company’s 2018 results are highlighted in our interactive dashboard: What To Expect From ArcelorMittal In 2018? You can make changes to our assumptions to arrive at your own fair price estimate for the company by using our interactive platform.
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