Ternium Reports Strong Quarterly Earnings Despite Lower Revenues
April 27, 2023
Trending News ☀️
Ternium ($NYSE:TX) S.A. (TX), one of the world’s leading steel producers, reported strong quarterly earnings despite significantly lower revenues. The company reported Non-GAAP earnings per share (EPS) of $1.91, exceeding the expected $0.92, driven by cost control measures and efficiency gains.
However, its revenues of $3.62 billion fell $30 million below estimates. Ternium is a leading steel producer and distributor based in Luxembourg, with operations in Argentina, Brazil, Colombia, Guatemala, Mexico, the United States, and Honduras. It provides a wide range of high-quality steel products for the automotive, construction, home appliances, and energy sectors. Despite the lower than expected revenue numbers, Ternium was still able to report strong quarterly earnings due to cost-cutting measures and other efficiency gains. This was driven by efficiency gains from its ongoing digitalization initiatives and cost containment efforts. Ternium’s strong results show its resilience amidst the current challenging economic environment. The company’s strong financial position and liquidity will provide it with more flexibility to further strengthen its business in the near future.
Market Price
The steel manufacturer’s stock opened at $41.0 and closed at $40.3, a 3.2% decrease from the previous closing price of $41.6. The company attributed the decreased revenue to lower steel prices in Europe and North America, a trend that is expected to continue for the remainder of the year.
However, cost savings and productivity initiatives helped offset the decrease in revenue and resulted in higher earnings for the quarter. Despite the decrease in revenue, TERNIUM S.A remained profitable and was able to make up some of the difference in cost savings and productivity initiatives. The company is confident that these initiatives will help them remain profitable in the future and continue to produce strong quarterly earnings. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Ternium S.a. More…
| Total Revenues | Net Income | Net Margin |
| 15.73k | 1.37k | 9.7% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Ternium S.a. More…
| Operations | Investing | Financing |
| 2.67k | -2.15k | -1.05k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Ternium S.a. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 17.91k | 3.65k | 62.3 |
Key Ratios Snapshot
Some of the financial key ratios for Ternium S.a are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 17.4% | 44.6% | 13.1% |
| FCF Margin | ROE | ROA |
| 12.8% | 10.7% | 7.2% |
Analysis
At GoodWhale, we have conducted an analysis of TERNIUM S.A‘s fundamentals. After taking into account several factors such as asset turnover, debt-to-equity, and financial stability, we have assigned a Risk Rating of “medium” to this investment. This indicates that while there is a certain degree of risk associated with investing in TERNIUM S.A, the risk is moderate and manageable. We have also detected one risk warning in the company’s balance sheet – become a registered user and check it out! With our comprehensive analysis and reporting, we can help you make an informed decision about investing in TERNIUM S.A. More…
Peers
In recent years, the Chinese steel industry has been undergoing a period of intense competition, with a number of major players vying for market share. Among them, Ternium SA has emerged as a key competitor, particularly in the production of high-quality steel products. The company has invested heavily in research and development in order to maintain its position as a leading player in the industry, and this has paid off in terms of both market share and profitability. While Ternium faces stiff competition from a number of other major Chinese steel producers, it is well-positioned to continue its growth in the years ahead.
– Lingyuan Iron & Steel Co Ltd ($SHSE:600231)
Lingyuan Iron & Steel Co Ltd is a Chinese steel producer with a market cap of $5.88B as of 2022. The company has a Return on Equity of -2.8%. Lingyuan Iron & Steel Co Ltd produces a variety of steel products including pipes, plates, and coils. The company has over 3,500 employees and operates in China, Europe, and the United States.
– Daehan Steel Co Ltd ($KOSE:084010)
Daehan Steel Co Ltd is a South Korean steel manufacturer. The company has a market cap of 232.09B as of 2022 and a Return on Equity of 28.52%. Daehan Steel Co Ltd is a leading manufacturer of steel products in South Korea. The company produces a wide range of steel products, including hot rolled coils, cold rolled coils, galvanized steel coils, and pre-painted steel coils.
– Xinjiang Ba Yi Iron & Steel Co Ltd ($SHSE:600581)
Xinjiang Ba Yi Iron & Steel Co Ltd is a Chinese steel company with a market cap of 5.72 billion as of 2022. The company has a Return on Equity of -24.16%. The company is involved in the production of iron and steel products.
Summary
Ternium S.A. is a leading steel producer in Latin America, with operations in Mexico, Argentina and Colombia. In their most recent earnings report, the company reported Non-GAAP EPS of $1.91 which beat analysts’ expectations by $0.92.
However, revenue of $3.62B missed expectations by $30M. Despite the better than expected earnings, the stock price reacted negatively to the news and moved down on the same day. Investors should take into account the company’s long term prospects, which are driven by its strong presence in the Latin American market, when making an investment decision.
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