Tickers in this Article: MT
We are retaining our Underperform recommendation on ArcelorMittal (MT) following its dismal third-quarter 2012 results. It turned to a loss in the quarter, hurt by weak economic conditions and lower steel pricing. Both revenues and adjusted loss per share missed the Zacks Consensus Estimates. The company announced its plans to cut its annual dividend. ArcelorMittal remains affected by the challenging economic conditions in Europe. It is also exposed to volatility in steel pricing and tough competition and has significant debt which is almost equal to its market capitalization. Steel industry oversupply due to imports and Chinese production has pressured prices and might lead to further price declines. Moreover, weakness in end markets due to macroeconomic uncertainty is another area of concern.