Steelmaker Cleveland-Cliffs Delivers Strongest Quarter in Three Years

Cleveland-Cliffs Inc. (NYSE:CLF) stock rose in Monday’s premarket trading after the steelmaker reported mixed third-quarter results and raised its outlook.

Third-Quarter Earnings Beat Estimates

Cleveland-Cliffs reported adjusted earnings of 28 cents per share, beating analysts’ estimate of 19 cents.

However, revenue of $5.612 billion missed the $5.724 billion consensus estimate.

Steel shipments increased to 4.2 million net tons from 4 million net tons a year earlier.

Adjusted EBITDA rose to $612 million from $286 million in the second quarter, exceeding the company’s guidance of $575 million.

The company ended Sept. 30 with $3.2 billion in liquidity.

Cleveland-Cliffs Forecasts Stronger Growth

CEO Lourenco Goncalves described the third quarter as the company’s strongest in three years, citing higher selling prices, increased shipments and lower unit costs compared with the previous quarter.

The company expects fourth-quarter adjusted EBITDA of approximately $715 million, up from $612 million in the third quarter. The company expects stronger pricing to partially offset seasonal pressures, planned maintenance outages and higher costs.

Meanwhile, Cleveland-Cliffs expects to significantly reduce debt in the fourth quarter through stronger free cash flow and proceeds from property sales.

The company remains on track to lower its net debt-to-EBITDA ratio below 2.5 by mid-2027.

Looking ahead, Goncalves cited steel imports remaining well below historical levels, longer lead times and growing customer appreciation for reliable domestic supply chains as factors supporting the improved outlook.

Based on signed customer contracts and current price forecasts, Cleveland-Cliffs expects adjusted EBITDA to exceed $4 billion in 2027.

Stelco Idles Galvanizing Lines Amid Canadian Oversupply

Stelco Holdings, which Cleveland-Cliffs acquired in 2024, delivered its strongest quarter since the acquisition, benefiting from improvements in Canada’s hot-rolled steel market.

However, persistent oversupply in Canada’s galvanized steel market and a lack of anticipated government action prompted Cleveland-Cliffs to indefinitely idle Stelco’s galvanizing lines.

The company expects affected employees to return when market conditions improve.

Meanwhile, Stelco will maintain overall production by shifting its focus to hot-rolled steel. The move is expected to boost EBITDA contributions while preserving approximately 2,000 Canadian jobs.

CLF Stock Price Activity: Cleveland-Cliffs shares are trading higher by 15.68% at $14.02 during premarket trading on Monday, according to Benzinga Pro data.

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