ArcelorMittal faces challenges with declining revenue in Q2 2025

In France, on May 1, 2025, the General Confederation of Labour (CGT), a trade union, organized a significant demonstration in Dunkirk to protest ArcelorMittal's planned job cuts impacting around 600 workers in northern and eastern regions. The protest coincided with an overall rise in tensions concerning employment and economic stability in the steel industry. Despite showing a commendable financial performance in Q2 2025, ArcelorMittal's revenue and profitability were under scrutiny due to various operational challenges. In the second quarter of the year, the company's revenue reached $15.9 billion, reflecting a slight decline of approximately 2% compared to the same period in the previous year. While sequentially there was an increase in revenue from Q1 2025, primarily attributed to rising steel selling prices, the underlying financial performance raised concerns among investors. The net income for Q2 saw a notable increase to $1.79 billion, largely supplemented by roughly $0.8 billion in exceptional gains, indicating possible dependency on one-time benefits rather than core business strength. The operating cash flow in Q2 was around $1.4 billion, showing significant improvement mainly due to a release in working capital. However, challenges in achieving core operational resilience persisted as the company faced revised steel demand forecasts and uncertainties related to U.S. tariffs, leading to fears of stagnant volumes. Over the past year, the firm has endured a decline in annual sales, dropping from $64 billion to $61 billion, while broader market indices saw growth, putting additional pressure on ArcelorMittal to demonstrate strength in performance. Overall, even though ArcelorMittal maintains a relatively moderate valuation with a price-to-earnings ratio of 10.5 against the S&P 500's 24.4, the financial stability of the company appears to be moderate at best. The steep levels of debt coupled with minimal cash reserves raise alarms about long-term viability. Additionally, the company's resilience during downturns has been very weak, with significant stock declines during previous economic crises, indicating potential challenges ahead for investors considering the attractiveness of ArcelorMittal stock amid a tumultuous economic landscape.