Quick Summary
- Cleveland-Cliffs delivered Q1 adjusted EBITDA of $95M, surpassing analyst expectations of $92M
- Earnings per share registered at -$0.40, falling short of the -$0.37 consensus forecast by $0.03
- Total revenue reached $4.92B, exceeding the projected $4.84B
- Shares declined approximately 1% in premarket hours to $9.84 following the earnings announcement
- Steel imports have dropped to levels not seen since the 2008 financial crisis, thanks to stricter trade enforcement
Cleveland-Cliffs delivered a mixed bag of first-quarter results — topping expectations on revenue and EBITDA while falling short on earnings — leaving investors unimpressed as shares drifted lower.
The steel producer announced adjusted EBITDA of $95 million for the first quarter on Monday, narrowly beating the Street’s $92 million projection. This marks a dramatic improvement from the same period last year, when the company recorded an EBITDA loss of $174 million.
Top-line results came in at $4.92 billion, surpassing the consensus forecast of $4.84 billion. However, earnings per share of -$0.40 disappointed analysts who had expected -$0.37, representing a three-cent shortfall.
Management highlighted an extraordinary $80 million energy expense related to severe winter weather conditions during the reporting period. Excluding this unusual charge, the company’s operational performance appears notably more robust.
Volume metrics remained relatively stable on a year-over-year basis, with shipments totaling 4.1 million tons. Price realization, however, showed positive momentum. CLF’s average net selling price climbed to $1,048 per ton, compared with $980 in the prior-year quarter.
Shares opened at $9.91 and were changing hands near $9.84 during premarket trading, representing roughly a 1% decline. Current pricing remains significantly below the stock’s 200-day moving average of $11.80.
Heading into the week, CLF shares were down 25% for the year, though they’ve posted a 36% gain over the trailing twelve months. The 52-week trading range spans from $5.63 to $16.70.
Tariff Enforcement Reshaping Market Dynamics
CEO Lourenco Goncalves delivered pointed commentary on trade policy developments. “Trade enforcement in the United States is working exactly as intended, with steel imports at their lowest levels since the global financial crisis,” he stated in the company’s earnings announcement.
Hot-rolled coil pricing currently hovers around $1,100 per ton — a substantial increase from levels below $700 before new tariffs on steel and aluminum imports took effect in early 2025.
This past April, the Trump administration modified the tariff framework. Importers now face a uniform 25% levy on the complete value of goods predominantly manufactured from steel, aluminum, or copper — replacing the previous structure that taxed only the metal component’s value.
Management reaffirmed its full-year outlook. The company continues to project shipments between 16.5 and 17.0 million tons alongside capital expenditures of approximately $700 million.
Wall Street Ratings and Insider Transactions
Analyst opinion remains divided. CLF currently holds a consensus “Hold” recommendation based on coverage from 11 analysts, including two Buy ratings, seven Holds, and two Sell ratings. The consensus price target of $12.69 suggests meaningful upside from present levels.
Argus upgraded the stock to “Hold” on April 6. Wells Fargo reduced its price objective from $12 to $9. Citigroup lifted its target from $11 to $13. GLJ Research maintained a “Sell” stance with a $9.42 price target.
Company Insider Activity
Regarding insider transactions, Director Edilson Camara acquired 19,700 shares at $10.13 in February — expanding his holdings by 88%. Meanwhile, COO Clifford T. Smith divested 200,000 shares at $10.46 during the same timeframe, trimming his position by approximately 26%.
Institutional stakeholders control 67.68% of outstanding CLF shares. Recent institutional buyers include Focus Partners Wealth, Prudential Financial, and Invesco, which added more than 520,000 shares in the second quarter.
The company maintains a debt-to-equity ratio of 1.15, alongside a current ratio of 1.95 and a market capitalization of $5.65 billion.
