ArcelorMittal Guides Higher Net; Xstrata Net Soars 86%

Nigel Thomas
08 Feb, 2011
New York City

ArcelorMittal traded at a six month high after the steel maker guided high profit in the current quarter and said it will increase output at its mines. Xstrata Plc, the largest coal exporter gained after it reported 86% increase in 2010 earnings but said growth will decline in the current year.

[R]8:00 AM New York – ArcelorMittal stock traded at a six month high after the steel maker guided high profit in the current quarter and said it will increase output at its mines. Xstrata Plc, the largest coal exporter gained after it reported 86% increase in 2010 earnings but said growth will decline in the current year.[/R]

ArcelorMittal Guides Higher

ArcelorMittal gained as much as 4.5% in European trading after it reported a net loss of $780 million in the final quarter of 2010. Higher raw materials cost and sluggish demand curtailed company’s ability to pass on the costs to consumers.

Hot rolled steel coil prices have declined for two quarters in a row of more than 8% in the last two quarters.

Profit in the year rose to $2.92 billion from $157 million a year ago on revenues of $78 billion compared to $61.02 billion.

Operating earnings in the last quarter were $1.85 billion and in the current quarter are estimated to be between $2 billion and $2.5 billion.

The company guided higher steel prices in the first quarter and also said it will increase raw material production at its mines.

Xstrata Net Surges 86%

Xstrata Plc, Switzerland based largest steel exporter said 2010 net soared 86% to $5.15 billion from $2.77 billion in the prior year.

The company benefited from the 38% increase in coal prices in 2010 to $99 a ton. The debt declined 38% to $7.6 billion and earnings per share increased to $1.77.

Coal output at company controlled mines declined 6% to 79.9 million tons in the year and copper output increased to $913,500 tons from 907,000 tons.

The company guided lower growth in the current year and said interest rates hikes in Asia and higher inflation will cut the rate below that in 2010.