Cleveland-Cliffs Posts Its Best Quarter in Three Years, and Its Shares Jump 16%

Keypoints:

• Third-quarter revenue was $5.6 billion, up 18% from a year earlier
• Adjusted EBITDA reached $612 million, above the company's $575 million guidance
• The company swung to net income of $165 million after a $134 million loss in the second quarter
• Management expects fourth-quarter adjusted EBITDA of about $715 million and more than $4 billion in 2027
• The stock closed at $14.10 on 19 October, up 16.34%

Cleveland-Cliffs, the largest flat-rolled steel producer in North America, reported third-quarter results on Monday. Chairman and chief executive Lourenco Goncalves called it the company's strongest quarter in three years. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $612 million. That compares with $286 million in the second quarter and $143 million a year earlier.

Price did most of the work. The average selling price rose $53 from the previous quarter to $1,177 per net ton. Shipments grew to 4.2 million net tons from 4.0 million. Automotive volumes reached their highest level since the third quarter of 2023. Direct automotive sales made up 28% of end-market revenue.

Profit turned around sharply. Cliffs earned $165 million, or $0.26 per share, on a GAAP basis. A quarter earlier it lost $134 million. Adjusted earnings of $0.28 per share beat the $0.24 analysts expected. Revenue of $5.61 billion landed slightly below consensus.

The market backdrop helped. Management says steel imports remain well below the 2009 to 2024 average of 5.8 million net tons per quarter. Domestic mills have benefited from stronger pricing as a result. Peers rose too. Nucor gained 1.74% and Steel Dynamics 1.92%.

The outlook is bold. Cliffs guided to adjusted EBITDA of about $715 million in the fourth quarter. For 2027, it said it could realistically average more than $1 billion per quarter, or over $4 billion for the year. That would be a major step up from this quarter.

Not everything is clean. Stelco, the Canadian business Cliffs acquired two years ago, had its strongest quarter. Even so, Goncalves said Canada's galvanized steel market is oversupplied. Its Hamilton galvanneal business remains at risk, and one Canadian operation has already been shut. Steel Dynamics reported record shipments after the close, but its shares fell on an earnings miss.