Ternium Rises as Company Posts Higher Earnings, Shipments

Ternium SA (TX), Latin America’s second- largest steelmaker, rose in New York after the company posted a 25 percent rise in earnings before interest, tax, depreciation and amortization and said both shipments and sales rose.

Ternium gained 3.5 percent to $24.72 today, after rising as much as 3.9 percent earlier. The stock declined 44 percent this year through yesterday.

EBITDA increased to $453 million, compared with $362.3 million a year earlier, Luxembourg-based Ternium said today in a statement. The average estimate of three analysts surveyed by Bloomberg was for earnings on that basis to drop to $336.7 million. Shipments of flat and long steel rose 16 percent, while revenue per ton gained about 14 percent to $1,045.

“Operating performance was strong,” Alexander Hacking, an analyst at Citigroup Inc. in New York, wrote in a report today. “Ternium continues to outperform its global steel peers.”

Net income attributable to shareholders slumped to $6.4 million, or 3 cents per American depositary share, from $151.7 million, or 76 cents, Ternium, based in Luxembourg, said. Net sales rose to $2.47 billion, beating the average estimate of $2.25 billion of five analysts surveyed by Bloomberg.

The drop in net income was driven by a $280.3 million non- cash loss primarily because of the Mexican peso’s depreciation on Ternium’s Mexican subsidiary’s U.S. dollar-denominated debt, the steelmaker said. Ternium’s Mexican unit has an $800 million outstanding loan, according to Bloomberg data.

Ternium, which doesn’t break out revenue from Mexico or Canada, had 57 percent of its 2010 revenue from North America.

To contact the reporter on this story: Rodrigo Orihuela in Buenos Aires at rorihuela@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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