Cleveland-Cliffs' (CLF) second-quarter results surpassed Wall Street's views, while the steelmaker issued an upbeat outlook, sending its shares soaring Thursday.
Adjusted loss narrowed to $0.20 a share for the June quarter from $0.51 a year earlier, topping the FactSet-polled consensus for a $0.21 loss. Revenue increased to $5.23 billion from $4.93 billion, exceeding the Street's $5.15 billion estimate.
The company's shares were up nearly 19% intraday. So far this year, the stock has lost 16% in value.
Cleveland-Cliffs expects third-quarter adjusted earnings before interest, taxes, depreciation and amortization of about $575 million, with further improvement projected for the next quarter, Chief Executive Lourenco Goncalves said in an earnings release. Second-quarter adjusted EBITDA climbed to $286 million from $94 million a year earlier.
"The second quarter marked another step in returning to the earnings power this company is capable of," Goncalves said. "Even with extended maintenance outages in April and May, our second-quarter adjusted EBITDA tripled from the (first-quarter) level."
The domestic steel market "remains strong," with demand continuing to improve, imports remaining "subdued" and lead times "extending further," the CEO said.
The company expects automotive volumes to further increase in the third quarter, helping absorb fixed costs as its finishing lines operate at higher utilization rates. "We returned to positive free cash flow during (the second quarter) and have begun reducing our debt, a trend that will continue in a more meaningful way for the foreseeable future," Goncalves said.
Earlier this week, B. Riley Securities said in a note to clients that Cleveland-Cliffs' investors were likely to be focused on the company's earnings potential in the third quarter, which should better reflect the rise in hot rolled coil pricing.
Cleveland-Cliffs continues to expect steel shipment volumes of about 16.5 million net tons to 17 million net tons for the 2026 full year. Second-quarter steel product sales volume declined to 4.03 million net tons from 4.29 million net tons a year earlier. Steelmaking revenue climbed to $5.05 billion from $4.77 billion.
"With average selling prices, volumes, and costs all moving in the right direction, our second-half earnings performance should be our strongest since 2021," Goncalves said. "We expect to finish the year on a positive note and enter 2027 with significant momentum and additional opportunities for upside, including the higher reset of fixed-price contracts and much improved profits in Canada."
On Monday, Steel Dynamics (STLD) logged better-than-expected second-quarter results amid higher steel prices and said it saw strong demand for steel and aluminum through the rest of the year and into the next one.
Price: $11.34, Change: $+1.89, Percent Change: +20.00%