ArcelorMittal, Norsk Hydro report loss

LONDON (MarketWatch) -- ArcelorMittal, the world's top steel maker, and aluminum producer Norsk Hydro on Wednesday each reported first-quarter losses as metals prices dropped and shipments slumped amid the global recession. ArcelorMittal swung to a $1.06 billion first-quarter loss after earning $2.37 billion in the year-earlier quarter. Its earnings before interest, tax, depreciation and amortization slumped to $883 million from $5.04 billion -- worse than the $1 billion the firm had previously forecast. Sales dropped to $15.12 billion from $29.81 billion. Shipments fell 45% to 16 million metric tons. Inventory write-downs caused ArcelorMittal to miss analyst estimates, according to Oppenheim analyst Peter Metzger. The Luxembourg firm, headed by London-based Indian steel magnate Lakshmi Mittal, sees a potential for price increases during the second and third quarters across major markets and products, and expects EBITDA to range between $1.2 and $1.5 billion in the second quarter. Analysts polled by FactSet had expected a second-quarter EBITDA of $1.31 billion. ArcelorMittal shares slipped 7.2%, and the stock is down 69% over 12 months. Norsk Hydro (NO:NHY: news , chart , profile ) said it lost 280 million Norwegian kroner ($42 million) in the first quarter after earning 1.09 billion kroner in the year-earlier period. Revenue dropped 22% to 16.85 billion kroner. The company cited the deepening global economic downturn, with historically-low aluminum prices. Prices started the quarter at $1,536 per metric ton and closed at $1,405, it noted. Norsk Hydro had been paring back production throughout the quarter. The company's outlook was bleak as well, with the company warning of further losses if permanent closures of plants are necessary. Norsk Hydro shares climbed 0.9% but are down 60% over 12 months. "We believe that Hydro has rallied in sympathy for recent positive moves in the copper price and that this is wrong. The aluminum outlook is terrible and unlike copper, inventories continue to rise from already record high levels," said Jason Fairclough, an analyst at Merrill Lynch.