Core Insights - Cleveland-Cliffs reported a revenue of $4.93 billion for the quarter ended June 2025, marking a year-over-year decline of 3.1% and an EPS of -$0.50 compared to $0.11 a year ago, indicating a significant drop in profitability [1] - The revenue exceeded the Zacks Consensus Estimate of $4.9 billion by 0.62%, while the EPS surprise was +26.47% against a consensus estimate of -$0.68 [1] Financial Performance Metrics - Total steel shipments were reported at 4,290 KTon, surpassing the average estimate of 4,202.55 KTon [4] - The average net selling price per net ton of steel products was $1,015, slightly below the average estimate of $1,022.99 [4] - Revenues from steelmaking totaled $4.77 billion, exceeding the average estimate of $4.75 billion, but reflecting a year-over-year decline of 2.9% [4] - Revenues from coated steel were $1.39 billion, matching the average estimate but showing a year-over-year decrease of 10% [4] - Revenues from slab and other steel products were $276 million, above the average estimate of $262.56 million, with a year-over-year decline of 13.2% [4] - Revenues from plate products were $275 million, slightly above the average estimate of $269.36 million, reflecting a year-over-year decline of 13.3% [4] - Revenues from cold-rolled steel were $645 million, exceeding the average estimate of $638.27 million, with a year-over-year decline of 9.3% [4] - Revenues from hot-rolled steel were $1.33 billion, slightly below the average estimate of $1.34 billion, but showing a year-over-year increase of 19.5% [4] Stock Performance - Cleveland-Cliffs shares have returned +60.1% over the past month, significantly outperforming the Zacks S&P 500 composite's +5.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements and Supplementary Data](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) For the six months ended June 30, 2025, Cleveland-Cliffs reported a net loss of $953 million, a significant increase from $44 million in the prior-year period, driven by a 7% decrease in revenues to $9.56 billion due to lower selling prices and reduced automotive demand Condensed Consolidated Financial Position (Unaudited) | (In millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $6,687 | $6,907 | | **Total Assets** | $20,471 | $20,947 | | **Total Current Liabilities** | $3,277 | $3,322 | | **Long-term Debt** | $7,727 | $7,065 | | **Total Liabilities** | $14,429 | $14,050 | | **Total Equity** | $6,042 | $6,897 | Condensed Consolidated Operations (Unaudited) | (In millions, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $4,934 | $5,092 | $9,563 | $10,291 | | **Operating Income (Loss)** | ($498) | $6 | ($1,036) | ($32) | | **Net Income (Loss)** | ($470) | $9 | ($953) | ($44) | | **Net Income (Loss) attributable to Cliffs shareholders** | ($483) | $2 | ($978) | ($65) | | **Diluted EPS** | ($0.97) | $0.00 | ($1.97) | ($0.13) | Condensed Consolidated Cash Flows (Unaudited) | (In millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided (used) by operating activities** | ($306) | $661 | | **Net cash used by investing activities** | ($256) | ($331) | | **Net cash provided (used) by financing activities** | $567 | ($418) | [Note 1 - Basis of Presentation and Significant Accounting Policies](index=10&type=section&id=NOTE%201%20-%20BASIS%20OF%20PRESENTATION%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) The company is a vertically integrated North American steel producer focused on value-added sheet products for the automotive industry, operating primarily through its Steelmaking segment - Cleveland-Cliffs is a vertically integrated steel producer focused on value-added sheet products, primarily for the automotive industry, with operations in the United States and Canada[23](index=23&type=chunk) - The company completed the acquisition of Stelco Holdings Inc. on November 1, 2024[24](index=24&type=chunk) - The company is organized into four operating segments but operates through one primary reportable segment: Steelmaking[25](index=25&type=chunk) [Note 3 - Acquisitions](index=12&type=section&id=NOTE%203%20-%20ACQUISITIONS) The Stelco acquisition on November 1, 2024, for approximately $3.2 billion, resulted in $789 million of goodwill, reflecting growth opportunities and synergies within the Steelmaking segment Stelco Acquisition Purchase Consideration | (In millions) | Amount | | :--- | :--- | | Total cash consideration | $2,450 | | Total share exchange consideration | $343 | | Total debt consideration | $415 | | **Total purchase consideration** | **$3,208** | - The preliminary purchase price allocation for the Stelco acquisition resulted in net identifiable assets of **$2.42 billion** and goodwill of **$789 million**[42](index=42&type=chunk) - Identifiable intangible assets acquired were valued at **$1.025 billion**, primarily consisting of customer relationships (**$953 million**) with a weighted average life of 15 years[43](index=43&type=chunk) [Note 4 - Revenues](index=15&type=section&id=NOTE%204%20-%20REVENUES) Total revenues for the six months ended June 30, 2025, decreased to $9.56 billion from $10.29 billion year-over-year, with the Steelmaking segment's automotive market experiencing a 17% decline Revenues by Market (Six Months Ended June 30) | (In millions) | 2025 | 2024 | | :--- | :--- | :--- | | **Steelmaking** | | | | Automotive | $2,546 | $3,077 | | Infrastructure and manufacturing | $2,843 | $2,813 | | Distributors and converters | $2,661 | $2,814 | | Other | $1,188 | $1,238 | | **Total Steelmaking** | **$9,238** | **$9,942** | Revenues by Product Line (Six Months Ended June 30) | (In millions) | 2025 | 2024 | | :--- | :--- | :--- | | Hot-rolled steel | $2,498 | $2,243 | | Cold-rolled steel | $1,236 | $1,460 | | Coated steel | $2,753 | $3,169 | | Stainless and electrical steel | $878 | $941 | | Plate steel | $522 | $650 | | **Total Steelmaking** | **$9,238** | **$9,942** | [Note 5 - Segment Reporting](index=16&type=section&id=NOTE%205%20-%20SEGMENT%20REPORTING) The Steelmaking segment's Adjusted EBITDA sharply declined to $83 million in Q2 2025 from $306 million in Q2 2024, resulting in a ($101) million loss for the first six months of 2025 Adjusted EBITDA by Segment (Three Months Ended June 30) | (In millions) | 2025 | 2024 | | :--- | :--- | :--- | | Steelmaking | $83 | $306 | | Other Businesses | $16 | $18 | | Intersegment Eliminations | ($2) | ($1) | | **Total Adjusted EBITDA** | **$97** | **$323** | Adjusted EBITDA by Segment (Six Months Ended June 30) | (In millions) | 2025 | 2024 | | :--- | :--- | :--- | | Steelmaking | ($101) | $701 | | Other Businesses | $26 | $35 | | Intersegment Eliminations | ($2) | $1 | | **Total Adjusted EBITDA** | **($77)** | **$737** | [Note 8 - Debt and Credit Facilities](index=22&type=section&id=NOTE%208%20-%20DEBT%20AND%20CREDIT%20FACILITIES) Total long-term debt increased to $7.73 billion as of June 30, 2025, primarily due to the issuance of $850 million in Senior Notes, while the company maintained $2.62 billion in available borrowing capacity under its ABL Facility - On February 6, 2025, the company issued **$850 million** of 7.500% Senior Notes due 2031[63](index=63&type=chunk) Long-Term Debt Summary | (In millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total principal amount | $7,815 | $7,148 | | Unamortized discounts and issuance costs | ($88) | ($83) | | **Total long-term debt** | **$7,727** | **$7,065** | - As of June 30, 2025, the company had **$1.38 billion** in borrowings under its ABL Facility and **$2.62 billion** in available borrowing capacity[68](index=68&type=chunk) [Note 14 - Capital Stock](index=28&type=section&id=NOTE%2014%20-%20CAPITAL%20STOCK) The company did not repurchase common shares in the first six months of 2025, in contrast to repurchasing 37.9 million shares for $733 million in the prior-year period, with $1.4 billion remaining under the current repurchase program - No common shares were repurchased during the three and six months ended June 30, 2025[90](index=90&type=chunk) - During the six months ended June 30, 2024, the company repurchased **37.9 million** common shares for an aggregate cost of **$733 million**[90](index=90&type=chunk) - As of June 30, 2025, **$1.4 billion** remained available under the active share repurchase program[90](index=90&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management attributes Q2 2025's weaker performance to volatile market conditions and weak light vehicle production, leading to the idling of six operations, while emphasizing competitive strengths and a strategy focused on automotive steel, footprint optimization, Stelco synergies, and financial flexibility - Market conditions in Q2 2025 saw higher HRC pricing (average **$910/nt**, up **16% YoY**) and lower imports, but demand was impacted by weak light vehicle production[112](index=112&type=chunk) - In 2025, the company decided to fully or partially idle six operations, including facilities at Dearborn Works, Conshohocken, Riverdale, and Steelton, to optimize its footprint and respond to market conditions[114](index=114&type=chunk) - The company's strategy focuses on maximizing its automotive steel business, optimizing its integrated footprint, capturing synergies from the Stelco acquisition, and maintaining financial flexibility with a focus on deleveraging[129](index=129&type=chunk)[134](index=134&type=chunk)[138](index=138&type=chunk)[141](index=141&type=chunk) - Liquidity as of June 30, 2025, was **$2.7 billion**, consisting of **$61 million** in cash and availability under the ABL Facility[166](index=166&type=chunk) [Steelmaking Results](index=36&type=section&id=STEELMAKING%20RESULTS) The Steelmaking segment's revenues decreased by 3% in Q2 2025 and 7% in the first six months of 2025, with gross margin falling to -5% in Q2 2025 due to lower average selling prices and increased depreciation from idled facilities Steelmaking Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenue | $4,771M | $4,915M | | Gross Margin % | (5)% | 3% | | Adjusted EBITDA | $83M | $306M | | Steel Shipments (k nt) | 4,290 | 3,989 | - The decrease in Q2 2025 gross margin was primarily caused by a lower average selling price (approx. **$200 million** impact) and an increase in depreciation expense (approx. **$120 million** impact) from idled facilities[156](index=156&type=chunk) [Liquidity, Cash Flows and Capital Resources](index=39&type=section&id=LIQUIDITY,%20CASH%20FLOWS%20AND%20CAPITAL%20RESOURCES) Net cash used by operating activities for the first six months of 2025 was $306 million, a significant reversal from the prior year, driven by lower net income and increased accounts receivable, resulting in negative free cash flow of ($570) million Cash Flow Summary (Six Months Ended June 30) | (In millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided (used) by operating activities | ($306) | $661 | | Net cash used by investing activities | ($256) | ($331) | | Net cash provided (used) by financing activities | $567 | ($418) | | **Free cash flow** | **($570)** | **$322** | - The negative variance in operating cash flow was driven by a **$1.1 billion** decrease in net loss after non-cash adjustments and a **$266 million** increase in accounts receivable[162](index=162&type=chunk) - The company anticipates total capital expenditures of approximately **$700 million** over the next 12 months[164](index=164&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company faces market risks from commodity price fluctuations, goodwill valuation, foreign currency exchange rates, and interest rates, utilizing derivatives to hedge some commodity exposures - The company is exposed to price fluctuations in raw materials (natural gas, scrap, coal) and its finished products (HRC), using cash-settled commodity swaps to hedge a portion of its natural gas and electricity exposure[188](index=188&type=chunk)[192](index=192&type=chunk) - The company is subject to foreign currency risk from its Canadian operations, where a **1%** change in the Canadian dollar exchange rate would result in a **$9 million** change in currency exchange income or expense[201](index=201&type=chunk) - The company has interest rate risk on its ABL Facility, where a **100 basis point** change in interest rates would result in a **$14 million** change to annual interest expense based on borrowing levels at June 30, 2025[202](index=202&type=chunk) [Controls and Procedures](index=52&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The President and Chief Executive Officer and the Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period[210](index=210&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal controls[211](index=211&type=chunk) [PART II - OTHER INFORMATION](index=53&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=53&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is actively defending against an ongoing adversary proceeding with Mesabi Metallics Company LLC, with a trial set for May 2027, and discloses environmental proceedings exceeding a $1 million threshold - The company is defending against a lawsuit from Mesabi Metallics alleging tortious interference and antitrust violations, with a trial set for May 2027, and believes the claims are without merit[214](index=214&type=chunk) - The company uses a disclosure threshold of **$1 million** for environmental-related administrative or judicial proceedings involving a governmental authority[215](index=215&type=chunk) [Risk Factors](index=53&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section directs readers to the company's Annual Report on Form 10-K for the year ended December 31, 2024, for a comprehensive description of significant business risks and uncertainties - The company directs readers to Part I, Item 1A, "Risk Factors" in its Annual Report on Form 10-K for the year ended December 31, 2024, for a description of the most significant risks[217](index=217&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) During Q2 2025, the company did not repurchase shares under its publicly announced program, but acquired 16,947 shares to satisfy tax withholding obligations on employee stock awards, with approximately $1.38 billion remaining available for repurchase Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid | Purchased as Part of Program | Remaining Authorization | | :--- | :--- | :--- | :--- | :--- | | April 1 - 30, 2025 | 5,747 | $8.03 | — | $1,375,931,379 | | May 1 - 31, 2025 | 7,340 | $7.13 | — | $1,375,931,379 | | June 1 - 30, 2025 | 3,860 | $7.17 | — | $1,375,931,379 | | **Total** | **16,947** | **$7.44** | **—** | | - The shares purchased were delivered to the company to satisfy tax withholding obligations on stock awards and were not part of the publicly announced repurchase program[219](index=219&type=chunk) [Mine Safety Disclosures](index=54&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) The company is committed to achieving zero injuries and incidents across all operations, with detailed mine safety and health information provided in Exhibit 95 of this Quarterly Report - The company's internal objective is to achieve zero injuries and incidents across all operations[220](index=220&type=chunk) - Mine safety disclosures required under the Dodd-Frank Act are included in Exhibit 95 of this Quarterly Report[221](index=221&type=chunk)

Cleveland-Cliffs (CLF 6.19%), a vertically integrated steel producer serving end-markets from automotive to infrastructure, reported its second-quarter 2025 results on July 21, 2025. The company posted a non-GAAP loss of $0.50 per share for Q2 2025, beating the consensus estimate of a $0.71 non-GAAP loss for Q2 2025, and generated $4.9 billion in GAAP revenue for Q2 2025, topping analyst forecasts of $4.86 billion (GAAP) for Q2 2025. Despite improvements in shipments and lower costs, Q2 2025 showed ongoing ...

Core Viewpoint - Cleveland-Cliffs reported a decline in revenue and earnings for the second quarter, but both metrics exceeded expectations, leading to a 5.6% increase in share price. The CEO expressed optimism regarding the potential benefits of recent steel tariffs for the company [1][2][3]. Financial Performance - Revenue for Cleveland-Cliffs decreased by 3.1% to $4.9 billion in the second quarter, while adjusted earnings per share fell to a loss of $0.50 from a positive $0.11 in the same quarter last year [2]. - Despite the year-over-year declines, the reported figures were better than anticipated, particularly in a challenging quarter for the automotive sector, which significantly contributes to Cleveland-Cliffs' revenue [3]. Market Context and Tariff Impact - CEO Lourenco Goncalves highlighted that the recent steel tariffs are expected to positively impact domestic manufacturing and the automotive industry, suggesting that foreign competitors will need to establish steel capacity in the U.S. to compete effectively [3]. - The market share of finished steel imports has only decreased by 5 percentage points, from 25% in January to 20% in May, indicating that while tariffs have reduced foreign competition, the anticipated benefits for domestic steelmakers have yet to materialize [7]. Operational Challenges - Cleveland-Cliffs has faced operational challenges, including idling a major blast furnace and several iron ore mines due to initial demand destruction from new tariffs [6][7]. - The company is currently losing money and is focused on cutting costs to generate cash flow for debt repayment, suggesting a cautious approach for investors until the benefits of tariffs are clearly realized [8].

Core Viewpoint - Cleveland-Cliffs Inc. has gained renewed confidence from Wall Street after better-than-expected Q2 2025 results, leading to an upgrade by KeyBanc Capital Markets to Overweight with a price forecast of $14 [1][5]. Financial Performance - The company reported a narrower adjusted loss of $0.50 per share for Q2 2025, beating expectations, with revenue of $4.93 billion [2]. - Steel shipments reached a record 4.3 million net tons, although the average selling price declined. Cost-cutting measures reduced steel unit costs by $15 per ton [3]. - Adjusted EBITDA turned positive at $97 million, and the company lowered its 2025 capital expenditure and SG&A guidance, expecting further cost improvements in the second half [3]. Strategic Insights - CEO Lourenco Goncalves highlighted strong domestic steel demand, a healthy order book, and supportive policy from the Trump administration. The end of a loss-making slab supply deal is expected to enhance margins and accelerate free cash flow and debt reduction [4]. - The upgrade reflects increased confidence in Cleveland-Cliffs' cost-cutting efforts and operational efficiencies, particularly in the high-margin automotive segment, alongside favorable trade protections and reshoring trends [5]. Future Outlook - The analyst revised the 2025 outlook, projecting EBITDA of $419 million, more than double the previous estimate. For Q3 2025, EBITDA expectations were raised to $197 million from $123 million, aided by an additional $20 per ton in cost savings [6]. - For 2026, EPS forecast was raised to $0.42 and EBITDA to $1.86 billion, with potential for EBITDA to exceed $2 billion if U.S. and Canadian steel prices outperform expectations [7]. Valuation and Asset Management - Valuation remains attractive, with shares trading at about 7x 2026 EV/EBITDA, within historical norms. The $14 price forecast reflects a multiple toward the higher end of that range, considering potential asset sales and stronger steel pricing [8]. - The company is exploring non-core asset divestitures, engaging J.P. Morgan to lead the sales process for idle properties, which could yield "billions of dollars" and enhance financial flexibility and shareholder returns [9].

Core Viewpoint - Cleveland-Cliffs Inc. reported a narrower adjusted loss of 50 cents per share for Q2 2025, compared to an expected loss of 68 cents, while revenues decreased by 3.1% year over year to $4.93 billion, surpassing estimates [1][6]. Operational Highlights - Steelmaking revenues were approximately $4.8 billion, reflecting a 2% year-over-year decline [2]. - The average net selling price per net ton of steel products was $1,015, down 9.8% year over year, missing the estimate of $1,020 [2]. - External sales volumes for steel products increased to roughly 4.3 million net tons, up 7.5% year over year, exceeding the estimate of 4.2 million net tons [2]. Financial Position - As of the end of Q2, the company had cash and cash equivalents of $61 million, a 5% increase from the previous quarter [3]. - Long-term debt rose by 1.7% sequentially to $7.727 billion [3]. - Total liquidity stood at $2.7 billion as of June 30, 2025 [3]. Outlook - The company revised its full-year 2025 guidance, projecting capital expenditures of approximately $600 million, down from $625 million [4]. - Selling, general and administrative (SG&A) expenses were lowered to around $575 million from $600 million [4]. - Steel unit cost reductions are targeted at approximately $50 per net ton compared to 2024 [4]. - Depreciation, depletion, and amortization (DD&A) expenses were revised upward to approximately $1.2 billion due to accelerated depreciation related to idled facilities [4]. - Cash pension and Other Post-Employment Benefits (OPEB) payments remain unchanged at approximately $150 million [4]. Price Performance - Shares of Cleveland-Cliffs are down 32.9% over the past year, compared to a 23% decline in its industry [5].

Core Insights - Cleveland-Cliffs Inc. (NYSE: CLF) has been positively viewed over the past four years despite facing challenges [1] - The article emphasizes the importance of access to high-quality equity research reports for investors [1] Company Analysis - The author has maintained a bullish stance on CLF stock, indicating confidence in its future performance [1] - The investment group Beyond the Wall Investing offers features such as a fundamentals-based portfolio and weekly analysis, which can aid investors in making informed decisions [1] Investment Strategy - The article highlights the benefits of having a single subscription to access extensive equity research, potentially saving investors thousands annually [1] - Regular alerts for short-term trade ideas based on technical signals are provided, which can enhance trading strategies [1]

Cleveland-Cliffs cut its quarterly loss nearly in half on Trump administration support and cost reductions. https://t.co/DcSqALiILL ...

Core Viewpoint - Investors are optimistic about Cleveland-Cliffs despite a challenging quarter, as the company managed to beat earnings expectations and is making progress in cost-cutting measures [1][4]. Group 1: Earnings Performance - Cleveland-Cliffs reported a net loss of $470 million, or $0.97 per share, reversing the small profit from Q2 2024 [3]. - The company shipped a record 4.3 million net tons of steel, a 7.5% increase year-over-year, but average selling prices fell by 10%, leading to a decline in revenue [3]. Group 2: Investor Sentiment - Investors reacted positively, with shares rising 13.7% after the earnings report, partly due to management's disclosure that $323 million of the net loss (about 69%) was from non-recurring charges related to idled facilities [1][4]. - The market is betting on the company's ability to improve profitability through cost reductions and the absence of non-recurring charges in future quarters [6]. Group 3: Future Guidance - Cleveland-Cliffs aims to reduce its cost of production by approximately $50 per ton in 2025 compared to 2024, which could help offset the decline in steel prices observed in Q2 [5]. - The company is also focusing on reducing capital spending and selling, general, and administrative expenses, alongside potential benefits from tariffs on imported steel [5].

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...