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Investing.com -- Ternium SA (NYSE:TX) shares fell 4.8% in after-hours trading Tuesday after the steel producer reported third-quarter earnings that missed analyst expectations and took a substantial write-down on deferred tax assets.
The Latin American steelmaker posted adjusted earnings of $0.10 per American Depositary Share (ADS), significantly below the analyst estimate of $0.79. Revenue came in at $3.96 billion, slightly missing the consensus forecast of $4.01 billion. The company’s results were heavily impacted by a $405 million non-cash charge related to a write-down of deferred tax assets at its Brazilian subsidiary Usiminas.
Despite the earnings miss, Ternium’s Adjusted EBITDA improved 4% sequentially to $420 million, with the EBITDA margin expanding to 11% from 10% in the previous quarter. Steel shipments increased 1% from the second quarter to 3.76 million tons but declined 9% YoY.
"Ternium continued improving its Adjusted EBITDA Margin, as steel production costs decreased, mainly reflecting lower raw material and purchased slab costs, as well as efficiency gains," said Máximo Vedoya, Ternium’s CEO.
Looking ahead, the company expects a slight decrease in Adjusted EBITDA for the fourth quarter due to seasonal shipment reductions across all markets, though it anticipates maintaining its EBITDA margin. The company projects lower revenue per ton in Mexico and Argentina, offset by ongoing cost reductions from lower raw material costs and optimization strategies.
Ternium’s net cash position stood at $715 million at the end of September, down $303 million from June, reflecting ongoing expansion investments in Mexico and changes in the fair value of Argentine securities.
The board approved an interim dividend of $0.90 per ADS, payable on November 11, representing a dividend yield of approximately 7% at current market prices.
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