ArcelorMittal Swings to Profit But Warns of Pressure from Steel Prices

LONDON—Steel giant ArcelorMittal on Tuesday said it swung to a net profit in the third quarter from a year earlier amid continued cost cuts, but cautioned that the fourth quarter would see crimped profitability due to falling U.S. steel prices and a surge in coking coal prices, a key steelmaking raw ingredient.

The Luxembourg-based steelmaker, the world's largest by production accounting for some 6% of global steel output, reported $680 million in net profit for the three months ended Sept. 30, compared with an impairment-weighted $711 million net loss in the same period a year earlier. ArcelorMittal didn't report any impairments in the third quarter.

The figure beat expectations for a $652 million net profit based on a poll of three analysts. Meanwhile, revenue fell 6.8% to $14.52 billion due to a 3.8% drop in steel shipments to 20.3 million tons and lower average steel sell prices during the period.

"Our third quarter results reflect the progress the company is making to improve the underlying performance of the business, as well as improved market conditions since the start of the year," said ArcelorMittal Chief Executive Lakshmi Mittal.

"Looking ahead, while real demand remains stable, we will be impacted by the unexpected significant increase in the price of coal. While expectations are for steel prices to align with the increased costs, in the interim the higher coal price will impact steel spreads and fourth quarter performance," he added.

Write to Alex MacDonald at [e-mail]

(END) Dow Jones Newswires

November 08, 2016 03:25 ET (08:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.