ArcelorMittal (MT) Q3 2026 earnings review
ArcelorMittal holds its profit per tonne, but project delays mount
ArcelorMittal, the world's largest steelmaker outside China, kept its per-tonne profit steady even as energy costs squeezed its European mills. Sales rose 5% from a year ago, while a $1.3 billion write-down to idle its bombed Ukrainian plant pushed the company into a reported loss. Chief executive Aditya Mittal pointed to strong pricing in Brazil and North America, which offset a 21% quarterly profit drop in Europe.
| Sales | $16,466M +5.2% from a year ago |
|---|---|
| Profit per share, excluding one-offs | $1.15 +85.5% from a year ago |
| EBITDA per tonne | $155 flat from last quarter, +40% from a year ago |
| 2026 project EBITDA outlook | Cut to ~$0.5B down from $0.7B on Liberia delays |
⚖️ Verdict: ⚪ Neutral
The standing case is unchanged because early volume gains from European trade barriers were cancelled out by project delays and rising costs. New European import caps helped flat steel volumes rise in a usually slow summer quarter, and idling the Ukrainian plant stops a multi-year cash drain. The bad news: heavy rains in Liberia and a slow furnace ramp-up in Alabama forced the group to cut its 2026 new-project profit plan from $700 million to $500 million, while net debt passed $10 billion.
The question now is whether European steel price hikes can outrun higher energy and carbon costs while delayed mining and US projects finally reach full speed. Bulls see January auto contract resets and a 50% drop in flat steel imports lifting 2027 earnings; bears see a commodity business burning cash and missing its own ramp-up schedules. Fourth-quarter Liberian ore shipments and first-quarter European realized prices will settle it.
🐂 Bull Case
Trade Rules Lift European Flat Steel Volumes
The European Union introduced a new tariff rate quota (TRQ, a cap on tax-free foreign steel imports) in July alongside its carbon border tax. ArcelorMittal expects these trade barriers to cut cheap imports and fill its local mills. In the third quarter, European flat steel imports fell by roughly half from a year ago, finance chief Genuino Christino said.
That drop helped the steelmaker's European flat product shipments rise 1.1% from the second quarter to 5.19 million tonnes, defying a usual summer slowdown. In response, the company "brought back all its European blast furnaces into operation" across France, Spain, and Poland, and it is also building electric arc furnaces (EAFs, which melt scrap using electricity) for low-carbon steel.
The volume recovery is still partial because European customers are burning through stockpiles of imported steel bought earlier in the year. That inventory drawdown contributed to a 14.3% quarterly drop in long steel shipments (beams and rebar used in construction), pulling total European shipments down 3.5% against a plan for flat-to-higher volumes. Even so, order books are full for the year.
What to watch: fourth-quarter European flat steel shipments, which management plans to grow by at least 10% from a year ago. Hitting that mark will confirm that customer destocking is ending and that domestic mills are capturing the lost import supply.
Americas Profits Offset the European Cost Squeeze
"Our third quarter performance provides further evidence of the structural improvement in ArcelorMittal's earnings capacity," chief executive Aditya Mittal said. To test that claim, look at profit per tonne of steel shipped: EBITDA (earnings before interest, taxes, depreciation, and amortization) held at $155 per tonne, matching the second quarter and rising 39.6% from $111 a year ago.
Strong pricing in the Americas did the heavy lifting while Europe and mining weakened. In Brazil, EBITDA rose 26.2% from last quarter to $506 million as selling prices climbed 1.9% and new anti-dumping tariffs curbed Chinese flat-steel imports. In North America, EBITDA held steady at $487 million (up 62.3% from a year ago) as a 5.7% price jump to $1,228 per tonne offset a 150,000-tonne volume loss from a Canadian strike and Mexican maintenance.
What to watch: fourth-quarter project return estimates for the Tubarão and Pecém downstream facilities in Brazil, which arrive with full-year results in February. Those figures will show how much extra profit the Latin American business can add to the group's $1.8 billion long-term project target.
Ukraine Idling Stops a Cash Drain
For over four years, the Kryvyi Rih steel and mining complex in Ukraine has been a persistent concern, burning cash under wartime power shortages and shelling. Since the conflict began, the Luxembourg-based group has spent over $700 million to keep the plant running. On September 25, management said it was "unable to safely and sustainably operate ArcelorMittal Kryvyi Rih (Ukraine) following multiple missile strikes" and idled the site.
Closing the plant pushed the company to a $391 million net loss for the quarter, because it recorded $852 million in asset write-downs, $293 million in severance and idling costs, and a $170 million tax charge. Stripping out those one-off charges, net profit rose 27.1% from last quarter to $868 million. Selling off existing inventory will fund the site's basic security, ending the ongoing cash drain.
What to watch: fourth-quarter cash costs in the 'Others' segment. A minimal cash outflow will confirm that inventory sales are covering site preservation as planned.
🐻 Bear Case
Project Delays Cut 2026 New Profit Target
ArcelorMittal's core growth pitch rests on a pipeline of new facilities meant to add $1.8 billion in yearly EBITDA, with $700 million of that gain scheduled for 2026. This quarter, the company cut that 2026 contribution target by 28.6% to $500 million, extending a pattern of timeline slips at its two flagship expansions in Liberia and the United States.
- Liberia 2026 iron ore shipments: cut to ~16 million tonnes, down from 18 million tonnes
- Mining segment EBITDA: $128 million, down 28.5% from last quarter and 38.8% from a year ago
- 2026 strategic project EBITDA contribution: cut to ~$500 million, down from $700 million
Heavy monsoon rains in Liberia stalled port shipments at 10.5 million tonnes over the first nine months, "reducing the expected full-year shipments to approximately 16Mt", the company said. Meanwhile, the new electric arc furnace in Calvert, Alabama is "moving a little bit slower than what we were expecting", Christino admitted, forcing the US plant to keep importing tariffed steel slabs for longer.
What to watch: fourth-quarter Liberia iron ore shipments, which need to reach 5.5 million tonnes by our math (up from about 3.5 million per quarter) to hit both the 16 million tonne full-year plan and the 20 million tonne yearly capacity rate.
Energy and Carbon Costs Squeeze Europe
While European trade barriers helped flat steel volumes, segment profitability went backward. European operating income fell 32.9% from the second quarter to $275 million (from 5.3% of segment sales to 3.6%), and segment EBITDA dropped 21.4% to $548 million. By our math, European EBITDA per tonne fell from $98 in the second quarter to $80.
The company blamed "a temporary mismatch between rapidly rising input costs and realized selling prices". Restarting idled blast furnaces adds carbon emission costs right away, and European energy prices rose during the summer. However, higher spot steel prices take a quarter to flow through the order book, and over 25% of European flat steel volume sits on annual auto contracts that do not reset until January.
What to watch: first-quarter European average selling prices (currently $974 per tonne) after annual automotive contracts reset on January 1. If contract prices fail to cover the higher energy and carbon bill, European margins will stay compressed despite lower imports.
Net Debt Tops $10 Billion on Outflows
ArcelorMittal burned $442 million in free cash flow during the third quarter, bringing its nine-month cash outflow to $1.94 billion. The company invested another $492 million in working capital (cash tied up in unsold inventory and unpaid customer bills, totalling $2.47 billion over nine months) while spending $1.07 billion on factories and mines.
Even with negative cash flow, management spent $390 million on dividends and share buybacks in the quarter ($1.10 billion over nine months). That combination pushed net debt up to $10.34 billion, up from $9.50 billion in June and $7.93 billion at the end of 2025. Net interest expense jumped 33.1% from last quarter to $181 million, partly due to a $37 million joint-venture charge.
What to watch: the fourth-quarter working capital release, which management plans to unwind most of the $2.47 billion nine-month build. Without a multi-billion-dollar cash release at year-end, the company cannot both lower net debt and fund its promised buybacks from internal cash.
Risks this quarter didn't answer
Three standing legal and trade risks received no financial resolution in the third-quarter materials.
- Italian legal claim: no update on the €7.0 billion (or €3.65 billion alternative) damages claim from Acciaierie d'Italia commissioners; the annual report will carry the next legal footnote.
- North American tariff carve-outs: Canadian and Mexican steel discounts narrowed, but management is still waiting on trade talks for a US tariff exemption for its Dofasco mill in Canada.
- Chinese steel overcapacity: local tariffs are shielding core markets for now, but any loosening of trade rules or downstream import leakage would expose margins to cheap Asian supply.
💲 Other KPIs
Profit in Sustainable Solutions (which makes low-carbon building panels, wind-tower steel, and operates Indian solar and wind farms) rose 17.8% from a year ago, though it fell 16.2% from the second quarter due to summer seasonality. Nine-month EBITDA is up 21.8% to $385 million, keeping the division near the pace needed to double profit by 2028.
Operating profit at the 60%-owned Indian joint venture rose 3.4% from last quarter and 22.6% from a year ago, as wider margins offset a 0.8% dip in sales to $1.64 billion. Nine-month steel shipments in India reached a record 5.90 million tonnes, up 5.4% from last year ahead of a furnace expansion in 2027.
The average diluted share count fell 1.4% from a year ago and 0.9% from last quarter as the steelmaker spent $277 million on buybacks, purchasing 3.4 million shares under its latest 10-million-share programme. Since buybacks began in September 2020, the group has retired 39% of its diluted shares, lifting per-share profit.
🔮 Guidance
Unchanged. The full-year spending plan still includes $1.7–1.9 billion for growth projects, and Christino said the $4.5–5.0 billion range remains a good reference for 2027. After $3.44 billion spent in the first nine months, the middle of the range leaves $1.31 billion for Q4 by our math, up 5.2% from Q4 last year.
Cut. The 2026 profit contribution from new projects drops by $200 million because heavy rains and higher shipping rates reduced Liberian iron ore volumes. Management left the long-term $1.8 billion project target unchanged and expects to recover the delayed $200 million in 2027.
Cut. Monsoon weather in the second and third quarters lowered the full-year shipment target by 2 million tonnes, following an earlier trim from '>18 million tonnes' in Q1. With 10.5 million tonnes shipped in the first nine months, the plan leaves 5.5 million tonnes for Q4 by our math, requiring the mine to hit its 20 million tonne yearly capacity pace.
Unchanged. Second-half shipments are still planned to beat the first half's 26.2 million tonnes, led by fourth-quarter European flat steel volume growth of at least 10% from a year ago. After 13.0 million tonnes shipped in Q3, beating the first half requires at least 13.2 million tonnes in Q4 by our math, up 1.5% from a year ago.
❓ Key Questions
How much will rising European carbon costs take from Q4 margins?
ArcelorMittal restarted all of its European blast furnaces to meet domestic demand, which immediately increases carbon dioxide emission costs. Management said fixed-cost savings will offset the carbon bill, but gave no dollar figure per tonne after European EBITDA fell 21.4% in Q3.
When will the Calvert electric furnace in Alabama reach full capacity?
The company previously planned for the new 1.5-million-tonne electric arc furnace at Calvert to reach full capacity in the second half of 2026. On the call, Christino said the ramp-up is moving slower than expected, leaving the plant exposed to tariffs on imported steel slabs.
What are the cost and return numbers for the Brazil projects?
ArcelorMittal has approved and started placing orders for the Tubarão cold-rolling and coating mill in Brazil, and is weighing another project at Pecém. Management deferred the profit estimates for both projects until fourth-quarter results in February 2027.
Will the Q4 working capital release cover both debt paydown and buybacks?
Nine-month working capital tied up $2.47 billion in cash, pushing net debt up to $10.34 billion. Management plans to unwind most of that build in the fourth quarter and hinted at returning more than 50% of free cash flow to shareholders.