Cleveland-Cliffs Inc.'s (CLF) shares closed at $9.40 yesterday, close to their 52-week low of $8.50.The company’s shares have lost 26.3% in the past six months, underperforming the Zacks Mining – Miscellaneous industry’s decline of 12%. The bearishness is due to the underlying challenges in the U.S. steel industry, partly stemming from the weakness in steel prices, which have triggered a downward revision in CLF’s earnings estimates.Technical indicators show that CLF has been trading below the 200-day simpl ...

Iron & steel stock Cleveland-Cliffs Inc (NYSE:CLF) was last seen down 3.5% at $9.20, after news broke that the steel producer will temporarily idle two Minnesota facilities. The move, reported by the Star Tribune, will result in hundreds of job cuts as auto manufacturers scale back orders in response to uncertainty surrounding President Donald Trump’s evolving tariff policies.On the charts, CLF sports a 2.2% year-to-date deficit. The equity is also off 57.1% over the last 12 months and heading for its worst ...

Group 1 - The article discusses the subscription service Beyond the Wall Investing, which offers access to high-quality equity research reports, potentially saving investors thousands of dollars annually [1] - Cleveland-Cliffs (CLF) is highlighted as a stock that has been underperforming the market despite the author's belief in its potential [1] - The investing group provides features such as a fundamentals-based portfolio, weekly analysis from institutional investors, and alerts for short-term trade ideas based on technical signals [1] Group 2 - The article emphasizes that past performance is not indicative of future results, and no specific investment recommendations are provided [2] - It notes that the views expressed may not reflect those of Seeking Alpha as a whole, and the analysts involved may not be licensed or certified [2]

Industry Overview - The U.S. steel industry is experiencing a pivotal moment due to the 25% tariff on all steel imports imposed by the Trump administration, aimed at revitalizing domestic production and reducing import dependency [1] - The tariffs have positively impacted U.S. steel prices, which had previously declined sharply due to increased imports and weaker demand [1][4] Company Impact - American steelmakers such as Nucor Corporation, Steel Dynamics, Cleveland-Cliffs, and United States Steel Corporation are expected to benefit from higher prices and reduced competition from cheaper imports [2] - Nucor and Steel Dynamics currently hold a Zacks Rank of 3 (Hold), while Cleveland-Cliffs has a Zacks Rank of 4 (Sell), and United States Steel Corporation holds a Zacks Rank of 5 (Strong Sell) [3] Price Trends - Benchmark hot-rolled coil (HRC) prices fell over 40% last year, dropping from $1,200 per short ton at the beginning of 2024 due to oversupply and reduced demand [4] - Recently, HRC prices have surged above $900 per short ton, reflecting a more than 30% increase this year, driven by expectations of reduced foreign supply and improved domestic demand [5] Long-term Benefits - The tariffs are expected to encourage reinvestment in U.S. manufacturing capabilities, leading to potential job creation and expansion of operations in key steel-producing regions [6] - This aligns with the broader goals of strengthening American manufacturing and reducing reliance on foreign production, particularly from China [6] Trade Concerns - Retaliatory tariffs from trading partners like Canada and the European Union pose risks to American exporters and could dampen the broader economic benefits of the steel tariffs [7] - The potential for a global trade war could disrupt trade flows and negatively impact overall economic growth, which may weaken long-term demand for steel [8] Future Outlook - The future trajectory of the U.S. steel industry will depend on global trade negotiations, domestic demand, and the ability of manufacturers to manage higher input costs [9] - If the tariffs lead to increased investment without significant economic fallout, it could signify a new era for American steel [9]

Core Insights - The article discusses the investment analysis approach of Michael Del Monte, highlighting his extensive experience in various industries and his macro-value-oriented investment strategy [1]. Group 1: Analyst Background - Michael Del Monte has over 5 years of experience as a buy-side equity analyst [1]. - Prior to his current role, he spent over a decade in professional services across multiple industries including Oil & Gas, Oilfield Services, Midstream, Industrials, Information Technology, EPC Services, and Consumer Discretionary [1]. - His investment analysis is characterized by a macro-value-oriented approach, focusing on cross-industry analysis to make investment recommendations [1].

Core Insights - Cleveland-Cliffs reported a revenue of $4.33 billion for the quarter ended December 2024, reflecting a 15.4% decrease year-over-year, with an EPS of -$0.68 compared to -$0.05 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $4.31 billion by 0.27%, while the EPS fell short of the consensus estimate of -$0.65 by 4.62% [1] Financial Performance Metrics - External sales volumes for steel products were 3,827 tons, slightly above the estimated 3,819.69 tons [4] - The average net selling price per ton of steel products was $976, lower than the estimated $986.27 [4] - Steelmaking revenues totaled $4.17 billion, down 15.9% year-over-year, and below the average estimate of $4.23 billion [4] - Revenues from coated steel were $1.23 billion, a decline of 18.6% compared to the previous year, and below the estimated $1.38 billion [4] - Revenues from slab and other steel products were $249 million, representing a 20.7% decrease year-over-year, and slightly above the estimated $243.21 million [4] - Revenues from plate products were $232 million, down 30.1% year-over-year, and below the estimated $255.50 million [4] - Revenues from cold-rolled steel were $581 million, a 6.3% decrease year-over-year, and below the estimated $606.17 million [4] - Revenues from hot-rolled steel were $1.03 billion, a 7.8% decrease year-over-year, and above the estimated $910.07 million [4] Stock Performance - Cleveland-Cliffs shares returned +6.5% over the past month, outperforming the Zacks S&P 500 composite, which declined by -2.3% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [3]

Financial Performance - Total revenues for 2024 were $19,185 million, a decrease of 12.8% from $21,996 million in 2023[446]. - Operating loss for 2024 was $756 million, compared to an operating income of $677 million in 2023[446]. - Net loss attributable to Cliffs shareholders for 2024 was $754 million, compared to a net income of $399 million in 2023[446]. - Cash and cash equivalents decreased to $54 million in 2024 from $198 million in 2023[445]. - Total assets increased to $20,947 million in 2024, up from $17,537 million in 2023[445]. - Long-term debt rose significantly to $7,065 million in 2024, compared to $3,137 million in 2023[445]. - Inventories increased to $5,094 million in 2024, up from $4,460 million in 2023[445]. - The company experienced a significant increase in goodwill, rising to $1,768 million in 2024 from $1,005 million in 2023[445]. - Net income for 2024 was a loss of $708 million, compared to a profit of $450 million in 2023 and $1,376 million in 2022[448]. - Comprehensive income attributable to Cliffs shareholders decreased to a loss of $874 million in 2024 from a profit of $226 million in 2023[448]. - Net cash provided by operating activities significantly dropped to $105 million in 2024 from $2,267 million in 2023[450]. Acquisition and Investments - The Stelco Acquisition was completed in Q4 2024, but it may be less accretive than expected, potentially impacting earnings per share and share price[206]. - The acquisition of Stelco was completed on November 1, 2024, with Stelco shareholders receiving CAD $60.00 in cash and 0.454 shares of Cliffs common stock per share[456]. - The Stelco Acquisition completed on November 1, 2024, involved total purchase consideration of $3,208 million, including $2,450 million in cash and $343 million in share exchange[511]. - The goodwill resulting from the Stelco Acquisition was $786 million, reflecting growth opportunities and potential synergies within the Steelmaking segment[513]. - The company incurred $63 million in transaction costs related to the Stelco Acquisition in 2024, impacting the pro forma net loss[515]. Operational Risks - The company faces potential disruptions in operations due to reliance on third-party suppliers for critical raw materials and production inputs, which could lead to increased costs[184]. - The company’s sales and competitive position depend on the ability to transport products to customers at competitive rates, with disruptions in transportation services potentially affecting operations[186]. - The company is exposed to fluctuations in energy and raw material costs, which can significantly impact production costs and profitability[185]. - The company’s operations are vulnerable to various risks, including natural disasters, equipment failures, and supply chain disruptions, which could adversely affect production and revenues[191]. - The company relies on IT systems for business operations, and disruptions or failures in these systems could negatively impact financial performance and operations[196]. - The company may face significant expenditures due to ongoing lawsuits and claims, which could adversely affect financial condition and liquidity[182]. - The company’s ability to implement capital projects on time and within budget is subject to various risks, including supply chain issues and labor-related factors[190]. - The company anticipates potential labor shortages in critical operational positions, which could adversely affect production[226]. - The company is subject to risks related to labor agreements, with several agreements expiring in 2025, creating uncertainty in labor costs[220]. - The company faces risks related to cybersecurity incidents that could disrupt business processes and adversely affect financial condition and cash flows[199]. - The company may not have adequate insurance coverage for certain business risks, which could lead to material adverse effects on financial condition and cash flows[208]. - The company is exposed to regulatory risks related to decarbonization initiatives, which could impose significant costs and impact competitiveness[210]. Environmental and Sustainability Initiatives - The company is engaged in major initiatives at its Butler and Middletown facilities to leverage DOE funding for capital projects aimed at increasing competitiveness and reducing GHG emissions[190]. - The company is investigating investments in renewable and clean energy initiatives, including projects funded by the DOE to reduce GHG emissions at its facilities[211]. - The company has expressed interest in utilizing clean hydrogen from nearby hydrogen hubs, with successful trials conducted at its Indiana Harbor facility[211]. Financial Liabilities and Debt Management - The company reported total long-term debt of $7,065 million as of December 31, 2024, an increase from $3,137 million in 2023[533]. - The total debt maturities as of December 31, 2024, amount to $7.148 billion, with significant maturities in 2027 ($1.560 billion) and 2028 ($1.268 billion)[568]. - The company issued an additional $600 million of 7.000% 2032 Senior Notes to finance part of the Stelco Acquisition[535]. - Cleveland-Cliffs Inc. issued $900 million aggregate principal amount of 6.875% 2029 Senior Notes, which were issued at par, to finance part of the Stelco Acquisition[541]. - The 6.875% 2029 Senior Notes bear interest at 6.875% per annum, payable semi-annually, and mature on November 1, 2029[542]. - Cleveland-Cliffs Inc. also issued $900 million aggregate principal amount of 7.375% 2033 Senior Notes, which were issued at par, for the Stelco Acquisition[546]. - The 7.375% 2033 Senior Notes bear interest at 7.375% per annum, payable semi-annually, and mature on May 1, 2033[547]. - The ABL Facility was amended to allow for the Stelco Acquisition, dividing $4.75 billion of aggregate lending commitments into a $4.25 billion tranche and a $500 million tranche[561]. Pension and Employee Benefits - The defined benefit pension plans' benefit obligations decreased from $4.571 billion in 2023 to $4.248 billion in 2024, while the OPEB plans' obligations increased from $1.036 billion to $1.147 billion[574]. - The company reported a net periodic benefit credit of $59 million for pension benefits and $152 million for OPEB plans in 2024[576]. - The actuarial loss on pension benefits was $165 million in 2024, compared to an actuarial gain of $116 million in 2023[577]. - The funded status of the defined benefit pension plans showed a deficit of $11 million in 2024, improving from a deficit of $289 million in 2023[574]. - The company expects pension benefit payments of $472 million and OPEB payments of $116 million in 2025[580]. - The discount rate for pension benefits increased from 5.12% in 2023 to 5.55% in 2024, while the OPEB discount rate rose from 5.15% to 5.59%[582]. - The expected return on plan assets for pension benefits is 7.85% in 2024, up from 7.66% in 2023[584]. - The health care cost trend rate for the next year is assumed to be 11.43%, significantly higher than the 5.49% in 2023[584]. - The asset allocation for pension assets in 2024 includes 32.7% in equity securities and 38.9% in fixed income[587]. - The total fair value of pension assets increased from $4,282 million in 2023 to $4,237 million in 2024[591]. - The ending balance of pension assets decreased to $692 million in 2024 from $770 million in 2023, reflecting sales and actual returns on plan assets[592]. - The actual return on pension assets relating to assets still held at the reporting date was $18 million in 2024, compared to a loss of $16 million in 2023[592].

Cleveland-Cliffs Inc. (NYSE:CLF) Q4 2024 Earnings Conference Call February 25, 2024 8:30 AM ET Company Participants Lourenco Goncalves - Chairman, President, and Chief Executive Officer Celso Goncalves - Executive Vice President and Chief Financial Officer Conference Call Participants Martin Englert - Seaport Research Partners Nick Giles - B. Riley Securities Philip Gibbs - KeyBanc Capital Markets Christopher LaFemina - Jefferies Carlos De Alba - Morgan Stanley Lawson Winder - Bank of America Michael Harris ...

Financial Data and Key Metrics Changes - For Q4 2024, the company reported an adjusted EBITDA loss of $81 million, primarily due to weaker automotive demand and lagged pricing [33] - Total shipments in Q4 were 3.8 million tons, lower than Q3 due to the idling of the C6 furnace and seasonally weaker demand [37] - Q4 price realization was $976 per net ton, a decrease of $70 per net ton from the previous quarter, influenced by the inclusion of Stelco and its lower price mix [37] Business Line Data and Key Metrics Changes - Direct shipments to the automotive sector in Q4 were the lowest since the pandemic, reflecting a significant impact from weak demand [33] - The company expects to improve shipment levels above 4 million tons in Q1 2025 due to better demand and full utilization of Stelco [37] - The inclusion of Stelco is expected to reduce average costs by an additional $40 per net ton in 2025 [39] Market Data and Key Metrics Changes - The demand for steel in 2024 was the weakest since 2010, with significant declines in automotive and construction sectors [8] - The company noted a significant uptick in demand for automotive products as 2025 begins, indicating a recovery in market share [23] - The first quarter of 2025 is expected to see a price increase of at least $10 per ton compared to Q4 2024 due to increased automotive shipments [101] Company Strategy and Development Direction - The company is focused on leveraging tariffs to strengthen domestic production and reduce reliance on foreign steel imports [11][12] - The acquisition of Stelco is seen as a strategic move to enhance operational efficiency and cost structure [16][18] - The company aims to achieve $120 million in synergies from the Stelco acquisition by the end of 2025, with a strong focus on maximizing value from the combination [18][145] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, citing improvements in order books and rising steel prices as positive indicators [6][23] - The company is prepared for the implementation of tariffs, which are expected to bolster domestic demand and reduce competition from foreign producers [10][109] - Management emphasized a commitment to debt reduction and maintaining financial flexibility despite current leverage levels [41][132] Other Important Information - The company reported a total reportable incident rate of 0.9% for 2024, highlighting a strong safety record [26] - The company has $3 billion in liquidity and plans to use free cash flow for debt reduction [40][132] - Capital expenditures for 2025 are expected to be $700 million, down from $800 million in 2024 [46] Q&A Session Summary Question: Discussion on evolving tariff environment and implications for Stelco - Management stated that tariffs are necessary and will benefit the overall business, with minimal negative impact on Stelco due to its Canadian operations [54][55] Question: Clarification on reporting tariffs in adjusted EBITDA - Management confirmed that results will be reported as they are, without excluding tariffs from adjusted EBITDA [58][59] Question: Volume cadence and cost guidance for 2025 - Management indicated that only 30% to 35% of volumes will be under fixed pricing, with cost reductions expected to materialize more in the latter half of the year [76][78] Question: Update on capital expenditures and project timelines - Management outlined a clear CapEx plan for 2025, with specific allocations for legacy operations and ongoing projects [88][90] Question: Conditions for potential restart of C6 furnace - Management stated that the C6 furnace remains indefinitely idle with no current plans for a restart [141] Question: Synergies from Stelco acquisition - Management expressed confidence in achieving and potentially exceeding the $120 million synergy target from the Stelco acquisition [145] Question: Working capital expectations for Q1 - Management indicated that working capital build in Q4 was to prepare for improved demand in 2025, with benefits expected in subsequent quarters [114][115] Question: Possibility of equity issuance - Management confirmed there are no plans for equity issuance, focusing instead on debt reduction [128][132]

Group 1 - Cleveland-Cliffs Inc reported wider-than-expected fourth-quarter losses of 68 cents per share and missed revenue expectations, leading to a 9.1% decline in stock price to $10.13 [1] - The stock is experiencing its worst daily percentage loss since a previous drop of 11.5% on November 5, struggling to break out from a four-year low of $8.99 [2] - Demand for steel remains cautious, influenced by the early stages of Trump's tariffs and a potential merger between Nippon Steel and U.S. Steel [1] Group 2 - In the options market, there has been significant activity with 21,000 calls and 11,000 puts exchanged, which is double the typical volume [3] - The most popular options are the weekly 2/28 10.50-strike and 12-strike calls, with new positions being opened at the May 12 call [3] Group 3 - Short interest has decreased by 8.2% over the last two weeks but still represents 8.7% of the stock's available float, indicating a potential for covering [4] - It would take approximately three days for shorts to cover at the average trading pace of Cleveland-Cliffs [4]