ArcelorMittal’s Capacity Utilization Expected To Decline

Analysts at Dahlman Rose & Co maintain their “hold” rating on ArcelorMittal MT, while reducing their estimates for the company. ArcelorMittal has reported its 2Q10 EBITDA higher than the estimates and in line with the consensus and the guidance. “Overall capacity utilization for the quarter increased to 78% from 72% in the prior quarter and the company saw shipments and average selling prices increase sequentially across all business segments.” “The company gave 3Q10 EBITDA guidance of $2.1 - 2.5 billion. The sequential decline in earnings is being attributed to raw material cost increases coupled with flat steel prices and near-term challenges from a slowdown in growth in China, debt problems in Europe, and a seasonal slowdown. Capacity utilization is expected to decline to 70%, with most cutbacks taking place in Europe,” the analysts say. Dahlman Rose has lowered its EPS estimates for 2010 and 2011 from $2.10 to $2.05 and from $3.55 to $2.90, respectively. More Analyst Ratings here.