Market Overview - Pre-market futures indicate a positive start to the trading week, with the Dow up 70 points, S&P 500 up 10 points, Nasdaq up 25 points, and Russell 2000 up 13 points, although all indexes are off their all-time highs from earlier in the month [1] Company Earnings - Cleveland-Cliffs (CLF) reported a loss of -$0.50 per share, better than the projected -$0.68, with revenues of $4.93 billion exceeding Zacks consensus by +0.62%, leading to a +4.5% increase in shares [2] - Domino's Pizza (DPZ) missed earnings expectations by -3% with earnings of $3.81 per share, marking its second miss in three quarters, but revenues of $1.15 billion were above expectations, reflecting a +4.3% year-over-year increase, resulting in a +3% rise in shares [2] Economic Indicators - The U.S. Leading Economic Indicators (LEI) report for June is expected to show a decline to -0.2% from May's -0.1%, with negative LEI numbers observed over the past six months, indicating potential recession signals [3][4] Upcoming Earnings Reports - More than 20% of S&P 500 companies are set to report Q2 earnings this week, with Alphabet (GOOGL) and Tesla (TSLA) being key highlights [5] - Alphabet is expected to see a +13.2% increase in earnings and +11.1% in overall revenues, while Tesla is projected to experience a -23.1% decline in earnings year-over-year and -11.9% in revenues [6] Economic Data Releases - This week will also see the release of Existing & New Home Sales, S&P flash Services and Manufacturing PMI, and Durable Goods Orders, with mixed expectations for these data points [7]

Group 1: Market Overview - Pre-market futures indicate a positive start to the trading week, with the Dow up 70 points, S&P 500 up 10 points, Nasdaq up 25 points, and Russell 2000 up 13 points, although all indexes are off their all-time highs from earlier in the month [1] Group 2: Company Earnings - Cleveland-Cliffs (CLF) reported a loss of -$0.50 per share, better than the projected -$0.68, with revenues of $4.93 billion exceeding Zacks consensus by +0.62%, leading to a +4.5% increase in shares [2] - Domino's Pizza (DPZ) missed earnings expectations by -3% with earnings of $3.81 per share, marking its second miss in three quarters, but revenues of $1.15 billion were up +4.3% year over year, resulting in a +3% increase in pre-market trading [3] Group 3: Economic Indicators - The U.S. Leading Economic Indicators (LEI) report for June is expected to show a further decline to -0.2% from May's -0.1%, with most LEI numbers negative over the past six months, indicating potential recession signals [4][5] - Upcoming economic reports include Existing & New Home Sales, S&P flash Services and Manufacturing PMI, and Durable Goods Orders, with mixed expectations for these data points [7] Group 4: Future Earnings Expectations - Alphabet (GOOGL) is expected to see a +13.2% increase in earnings and +11.1% in overall revenues, while Tesla (TSLA) is projected to experience a -23.1% decline in earnings year over year and -11.9% in revenue [6]

Financial Data and Key Metrics Changes - Adjusted EBITDA in Q2 improved by $271 million from the prior quarter, driven by higher shipment volumes and operational efficiency [5] - The average selling price increased by $35 per ton to $10.15, while unit costs decreased by $15 per ton [21][22] - The company ended the quarter with $2.7 billion in liquidity and no near-term maturities, with net debt on a downward trajectory [24] Business Line Data and Key Metrics Changes - Shipment volumes reached 4.3 million tons, a 150,000 ton increase from the prior quarter, allowing for more efficient mill operations [21] - The stainless steel business saw a $150 million investment in a bright annealing line, expected to improve quality and productivity [16][18] Market Data and Key Metrics Changes - The Section 232 tariffs have positively impacted both the steel and automotive sectors, with flat rolled steel imports and light vehicle imports hitting multi-year lows [6][7] - The company is positioned to benefit from the resurgence in automotive production in the U.S., as OEMs are moving production back from Mexico and Asia [70][71] Company Strategy and Development Direction - The company is focused on cost-cutting and optimizing its footprint, with expectations for further cost reductions in Q3 and Q4 [5][32] - Cleveland Cliffs is exploring potential sales of non-core assets to unlock value for shareholders, with JPMorgan engaged as an advisor [25][96] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the macro trends aligning favorably for the company, anticipating a better second half of 2025 compared to the first half [28] - The management highlighted the need for a new Federal Reserve Chairman to lower interest rates, which would benefit the automotive sector [12][13] Other Important Information - The company is vertically integrated, relying on American iron ore and coal, which differentiates it from competitors who depend on imported feedstock [15] - The company has seen a significant reduction in working capital due to inventory reductions, particularly in raw materials [22][40] Q&A Session Summary Question: How should we think about the cadence of cost reductions from here? - Management expects costs to decrease by another $20 per ton from Q2 to Q3, with further reductions anticipated in Q4 [32] Question: What are the expectations for free cash flow generation in the second half? - Free cash flow is expected to improve as working capital continues to be released, with a history of generating over $1 billion in free cash flow annually [40][41] Question: Can you provide insights on automotive volumes in Q2? - Automotive volumes are growing as OEMs are moving production back to the U.S. and reducing reliance on imports [70][71] Question: What is the outlook for average selling prices in Q3? - Average selling prices are expected to remain stable, with shipments similar to Q2 levels [53][56] Question: Can you elaborate on the non-core assets that may be sold? - The company is open to selling non-core assets that could generate significant cash inflow, which would be used for debt reduction [96][104]

Financial Data and Key Metrics Changes - Adjusted EBITDA in Q2 improved by $271 million from the prior quarter, driven by higher shipment volumes and operational efficiency [4] - Average selling price increased to $10.15 per ton, a $35 per ton increase from the prior quarter, primarily due to higher index pricing [20] - Unit costs decreased by $15 per ton, contrary to previous expectations of a slight increase [20] Business Line Data and Key Metrics Changes - Volumes reached 4.3 million tons, a 150,000 ton increase from the prior quarter, allowing for more efficient mill operations [20] - The stainless steel business saw a significant investment of $150 million in a bright annealing line, expected to improve quality and productivity [16] Market Data and Key Metrics Changes - The U.S. steel market remains strong, with Section 232 tariffs positively impacting both the steel and automotive sectors [5][6] - Imported steel and automotive imports hit multi-year lows, indicating a favorable environment for domestic producers [6] Company Strategy and Development Direction - The company is focused on cost-cutting and optimizing its footprint, with initiatives expected to show impact in the second half of the year [4] - Cleveland Cliffs is positioned to support the resurgence in American vehicle production, leveraging its integrated business model [14][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the macro trends aligning favorably for the company, anticipating a better second half of 2025 compared to the first half [28] - The company expects to continue reducing costs and improving EBITDA generation in the coming quarters [26] Other Important Information - The company ended the quarter with $2.7 billion in liquidity and no near-term maturities, with net debt on a downward trajectory [23] - Plans for potential non-core asset sales are underway, which could unlock significant value for shareholders [24][93] Q&A Session Summary Question: How should we think about the cadence of cost reductions from here? - Management expects costs to decrease by another $20 per ton from Q2 to Q3, with further reductions anticipated in Q4 [32] Question: Can you provide insights on CapEx expectations for 2027? - There is no reline scheduled for 2026, and the Middletown project is being revamped to enhance operations without hydrogen [34][36] Question: How should we think about free cash flow generation in the second half? - Free cash flow is expected to improve significantly, with a focus on using cash to pay down debt [41] Question: What are the expectations for average selling price and volume in Q3? - Shipments are expected to remain flat at 4.3 million tons, with continued EBITDA improvement anticipated [52][56] Question: What is the outlook for the Canadian market? - Management believes there is potential for growth in Canada, contingent on local policies and market conditions [60][62] Question: Can you discuss automotive volumes in Q2? - Automotive volumes are growing as OEMs shift production back to the U.S. and reduce reliance on imports [69][70]

Financial Performance & Outlook - Cleveland-Cliffs reported revenues of $4.9 billion for Q2 2025[6] - Adjusted EBITDA for Q2 2025 was $97 million, with expectations for continued improvement from Q2 to Q3[6] - The company released over $200 million in inventory working capital during Q2 2025[6] - Cleveland-Cliffs expects to reduce steel unit costs by approximately $160 per ton over three years[55] Steel Shipments & Market Dynamics - Record quarterly steel shipments of 4.3 million net tons were achieved in Q2 2025[6] - Steel shipments increased by 150,000 tons from the prior quarter[11] - The average selling price (ASP) increased by $35 per ton due to higher index pricing, partially offset by lower slab pricing[11] Asset Optimization & Cost Savings - Flat-rolled optimization is expected to yield approximately $145 million in annual savings[15] - Repositioning away from non-core assets is projected to generate around $165 million in annual savings[15] - The company announced the idling of several facilities, including Riverdale, Conshohocken, and Steelton, resulting in approximately $90 million, $45 million, and $30 million in expected annual savings, respectively[16] Trade & Tariffs - Tariffs on steel imports from various countries, including Canada, Brazil, and Mexico, have increased to 50%[18] - Imports of light vehicles from Japan and South Korea are down by more than 30% year-to-date[22] Capital Expenditure & Debt Management - The 2025 capital expenditure guidance has been lowered to approximately $600 million[57] - The company has a liquidity of $2.7 billion[6]

Group 1 - Cleveland-Cliffs reported a quarterly loss of $0.5 per share, better than the Zacks Consensus Estimate of a loss of $0.68, and compared to earnings of $0.11 per share a year ago, representing an earnings surprise of +26.47% [1] - The company posted revenues of $4.93 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.62%, but down from $5.09 billion year-over-year [2] - Cleveland-Cliffs shares have increased approximately 0.9% since the beginning of the year, while the S&P 500 has gained 7.1% [3] Group 2 - The earnings outlook for Cleveland-Cliffs is mixed, with the current consensus EPS estimate for the coming quarter at -$0.20 on revenues of $4.97 billion, and -$1.69 on revenues of $19.46 billion for the current fiscal year [7] - The Zacks Industry Rank indicates that the Steel - Producers industry is currently in the bottom 14% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] Group 3 - Cleveland-Cliffs has surpassed consensus EPS estimates only once in the last four quarters, while it has topped consensus revenue estimates three times during the same period [2][6] - The estimate revisions trend for Cleveland-Cliffs was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6]

[Second-Quarter Consolidated Results](index=1&type=section&id=Second-Quarter%20Consolidated%20Results) Cleveland-Cliffs reported second-quarter 2025 revenues of **$4.9 billion**, a GAAP net loss of **$470 million** including **$323 million** in non-recurring charges, and a significant sequential improvement in Adjusted EBITDA to **$97 million** from a first-quarter loss | Financial Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | **Revenues** | $4.9 billion | $4.6 billion | | **GAAP Net Loss** | ($470 million) | ($483 million) | | **Adjusted Net Loss** | ($247 million) | ($456 million) | | **Adjusted Net Loss per Share** | ($0.50) | ($0.92) | | **Adjusted EBITDA** | $97 million | ($174 million) | | **Steel Unit Cost Reduction (QoQ)** | $15 per net ton | - | - Footprint optimization initiatives announced previously are already generating a positive impact on both costs and revenues, with further improvements expected in Q3 and Q4[3](index=3&type=chunk) - The company will not extend its five-year contract to supply slabs from Indiana Harbor, which had become a negative contributor to EBITDA due to low index-based prices[3](index=3&type=chunk)[5](index=5&type=chunk) - The CEO noted the positive impact of tariffs on domestic manufacturing and expects the trend to continue, benefiting both the domestic steel and automotive industries[5](index=5&type=chunk) [Steelmaking Segment Results](index=2&type=section&id=Steelmaking%20Segment%20Results) The Steelmaking segment achieved record sales volume of **4.3 million net tons** in Q2 2025, but revenues slightly decreased to **$4.77 billion** with the average net selling price per ton falling to **$1,015**, resulting in a gross margin loss of **$225 million** | Metric | Q2 2025 | Q2 2024 | Q1 2025 | | :--- | :--- | :--- | :--- | | **Steel Products (k net tons)** | 4,290 | 3,989 | 4,140 | | **Avg. Net Selling Price/ton** | $1,015 | $1,125 | $980 | | **Revenues (in millions)** | $4,771 | $4,915 | $4,467 | | **Gross Margin (in millions)** | ($225) | $145 | ($400) | - Q2 2025 steel product sales mix consisted of **40% hot-rolled**, **27% coated**, **15% cold-rolled**, **5% plate**, **3% stainless and electrical**, and **10% other**[6](index=6&type=chunk) - Revenue breakdown by market: **31% to infrastructure and manufacturing**, **30% to distributors and converters**, **26% to automotive**, and **13% to steel producers**[7](index=7&type=chunk) [Liquidity](index=2&type=section&id=Liquidity) As of June 30, 2025, Cleveland-Cliffs reported total liquidity of **$2.7 billion** - The company had **$2.7 billion** in total liquidity as of June 30, 2025[8](index=8&type=chunk) [Outlook](index=3&type=section&id=Outlook) The company updated its full-year 2025 guidance, lowering expectations for capital expenditures and SG&A expenses while increasing the forecast for depreciation, depletion, and amortization due to accelerated depreciation from idled facilities | Full-Year 2025 Guidance | Previous Expectation | Updated Expectation | | :--- | :--- | :--- | | **Capital Expenditures** | $625 million | ~$600 million | | **SG&A Expenses** | ~$600 million | ~$575 million | | **Depreciation, Depletion & Amortization** | ~$1.1 billion | ~$1.2 billion | | **Steel Unit Cost Reductions (vs 2024)** | Maintained | ~$50 per net ton reduction | | **Cash Pension & OPEB Payments** | Maintained | ~$150 million | [Financial Tables](index=6&type=section&id=Financial%20Tables) This section provides detailed unaudited condensed consolidated financial statements for the periods ended June 30, 2025, including Statements of Operations, Financial Position, and Cash Flows, along with reconciliations of GAAP to non-GAAP measures [Statements of Unaudited Condensed Consolidated Operations](index=6&type=section&id=STATEMENTS%20OF%20UNAUDITED%20CONDENSED%20CONSOLIDATED%20OPERATIONS) For the second quarter of 2025, consolidated revenues were **$4.934 billion**, leading to an operating loss of **$498 million** and a net loss of **$470 million** due to increased operating costs including restructuring charges | (In millions) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Revenues** | $4,934 | $5,092 | | **Operating Income (Loss)** | ($498) | $6 | | **Net Income (Loss)** | ($470) | $9 | | **Diluted Loss Per Share** | ($0.97) | $0.00 | [Statements of Unaudited Condensed Consolidated Financial Position](index=7&type=section&id=STATEMENTS%20OF%20UNAUDITED%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20POSITION) As of June 30, 2025, total assets were **$20.47 billion**, slightly down from year-end 2024 due to reduced inventories, while total liabilities increased to **$14.43 billion** primarily from a rise in long-term debt | (In millions) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $6,687 | $6,907 | | **Inventories** | $4,699 | $5,094 | | **Total Assets** | $20,471 | $20,947 | | **Long-Term Debt** | $7,727 | $7,065 | | **Total Liabilities** | $14,429 | $14,050 | | **Total Equity** | $6,042 | $6,897 | [Statements of Unaudited Condensed Consolidated Cash Flows](index=8&type=section&id=STATEMENTS%20OF%20UNAUDITED%20CONDENSED%20CONSOLIDATED%20CASH%20FLOWS) In Q2 2025, net cash provided by operating activities significantly declined to **$45 million** from **$519 million** in Q2 2024, impacted by lower net income despite a positive change in inventories | (In millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $45 | $519 | | **Net cash used by investing activities** | ($111) | ($152) | | **Net cash provided (used) by financing activities** | $68 | ($287) | [Non-GAAP Reconciliations](index=9&type=section&id=NON-GAAP%20RECONCILIATION) This section provides reconciliations for non-GAAP financial measures, detailing adjustments to GAAP net income (loss) to derive Adjusted Net Income (Loss) and Adjusted EBITDA, primarily excluding non-recurring charges for idled facilities | (In millions) | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | **Net Income (Loss) Attributable to Cliffs** | ($483) | ($495) | $2 | | **Adjusted Net Income (Loss)** | ($247) | ($456) | $50 | | **Adjusted EPS - Diluted** | ($0.50) | ($0.92) | $0.11 | | (In millions) | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | **Net Income (Loss)** | ($470) | ($483) | $9 | | **Total EBITDA** | ($76) | ($208) | $291 | | **Total Adjusted EBITDA** | $97 | ($174) | $323 |

Core Insights - Cleveland-Cliffs Inc. (CLF) is expected to report second-quarter 2025 results on July 21, with a projected revenue of $4.9 billion, indicating a year-over-year decline of 3.8% [4][7] - The company has experienced a trailing fourth-quarter negative earnings surprise of approximately 9.7% and a negative surprise of around 17.9% in the last reported quarter [1][2] - Higher steel prices and increased volumes are anticipated to have positively impacted CLF's performance, although rising unit costs may offset these gains [5][10] Revenue Estimates - The Zacks Consensus Estimate for CLF's second-quarter consolidated revenues is $4,899.2 million, reflecting a 3.8% decline compared to the previous year [4][7] - The average net selling price per net ton of steel products is estimated to be $1,020, representing a 4.1% increase from the prior quarter [8] Factors Influencing Performance - CLF is expected to benefit from higher steel prices, which have rebounded following a decline in 2024 due to reduced demand and oversupply [5][7] - The imposition of a 25% tariff on steel imports in March 2025 and its subsequent increase to 50% in June 2025 have contributed to a surge in hot-rolled coil (HRC) prices [5][10] - External sales volumes for steel products are projected at 4.2 million net tons, indicating a 1.4% sequential rise and a 5.3% year-over-year increase [9] Cost Considerations - Steelmaking unit costs are expected to have risen by $5 per ton in the second quarter compared to the first quarter, which may offset the benefits from higher prices and volumes [10] - Despite anticipated cost increases in the second quarter, a reduction in costs is expected in the latter half of 2025 due to the idling of underperforming assets [10] Earnings Prediction - The Earnings ESP for CLF is -4.60%, with the consensus estimate indicating a loss of 67 cents for the second quarter [12] - CLF currently holds a Zacks Rank of 3, suggesting a neutral outlook for earnings performance [12]

Company Performance - Cleveland-Cliffs (CLF) closed at $9.39, reflecting a +2.74% increase from the previous day, outperforming the S&P 500's daily gain of 0.54% [1] - Over the last month, the company's shares have risen by 24.69%, while the Basic Materials sector experienced a slight loss of 0.05% and the S&P 500 gained 4.2% [1] Upcoming Earnings Disclosure - The earnings report for Cleveland-Cliffs is scheduled for July 21, 2025, with an anticipated EPS of -$0.67, representing a 709.09% decline compared to the same quarter last year [2] - The consensus estimate for revenue is $4.9 billion, indicating a 3.83% decrease from the same quarter last year [2] Fiscal Year Estimates - For the entire fiscal year, Zacks Consensus Estimates predict an EPS of -$1.83 and revenue of $19.46 billion, reflecting changes of -150.68% and +1.45% respectively from the previous year [3] - Recent adjustments to analyst estimates suggest a positive outlook for the business, as these revisions often align with short-term business dynamics [3] Zacks Rank and Industry Performance - The Zacks Rank system, which evaluates estimate changes, currently ranks Cleveland-Cliffs at 3 (Hold), with a recent 13.02% decrease in the EPS estimate over the past month [5] - The Steel - Producers industry, part of the Basic Materials sector, holds a Zacks Industry Rank of 199, placing it in the bottom 20% of over 250 industries [6]

Core Viewpoint - Rosen Law Firm is investigating potential securities claims on behalf of shareholders of Cleveland-Cliffs Inc. due to allegations of materially misleading business information issued by the company [1]. Group 1: Company Financial Performance - On May 7, 2025, Cleveland-Cliffs reported a GAAP net loss of $483 million for Q1 2025, an increase from a $434 million GAAP net loss in Q4 2024 [3]. - The company announced plans to fully or partially idle six facilities to optimize operations and release excess working capital [3]. - CEO's statement indicated that the first-quarter results were negatively impacted by underperforming non-core assets and lower index prices from late 2024 and early 2025 [3]. Group 2: Stock Market Reaction - Following the financial results announcement, Cleveland-Cliffs' stock fell over 15% on May 8, 2025, and an additional 2% on May 9, 2025 [3]. Group 3: Legal Action and Investor Rights - Investors who purchased Cleveland-Cliffs securities may be entitled to compensation through a class action lawsuit without any out-of-pocket fees [2]. - The Rosen Law Firm is preparing a class action to seek recovery of investor losses [2]. Group 4: Rosen Law Firm's Credentials - The Rosen Law Firm has a strong track record in securities class actions, having achieved the largest securities class action settlement against a Chinese company at the time [4]. - The firm has been ranked in the top 4 for securities class action settlements since 2013 and recovered hundreds of millions for investors, including over $438 million in 2019 [4].