Core Insights - Cleveland-Cliffs (CLF) stock declined significantly after reporting disappointing fourth-quarter results, with revenue and losses worse than expected [1][2] Financial Performance - The company reported $4.33 billion in revenue for Q4 2024, representing a decline of over 15% year-over-year [2] - An adjusted loss per share of $0.68 was reported, which is substantially larger than the $0.05 adjusted loss per share from the same quarter last year [2] Market Conditions - CEO Lourenco Goncalves described 2024 as "the worst steel demand environment since 2010," excluding the pandemic, citing a decline in U.S. vehicle production and increased steel imports leading to "unsustainably low" prices [3][7] - The company is experiencing lower sales and larger losses than analysts had anticipated, attributed to the influx of vehicle and steel imports [7] Strategic Moves - Cleveland-Cliffs is reportedly considering a joint bid with Nucor for U.S. Steel following the blocking of its $14.1 billion acquisition by Japan's Nippon [4][7] - The CEO expressed optimism that the fourth quarter would be the worst for the company, anticipating a rebound in 2025 due to built-up inventory and regulatory changes [5] Regulatory Environment - The CEO praised proposed tariffs by U.S. President Donald Trump on Canada, China, and Mexico, viewing them as beneficial for U.S. manufacturing and specifically for Cleveland-Cliffs [6] - Signs of a "dramatic rebound" in early 2025 were noted, suggesting potential recovery for the company [6]

Core Viewpoint - Cleveland-Cliffs Inc. reported a wider adjusted loss in Q4 2024 compared to the previous year, with revenues declining but still surpassing consensus estimates [1][2]. Financial Performance - The adjusted loss for Q4 2024 was 68 cents per share, compared to a loss of 5 cents in the same quarter last year, and was worse than the Zacks Consensus Estimate of a loss of 65 cents [1]. - Revenues decreased approximately 15.4% year over year to $4,325 million, exceeding the Zacks Consensus Estimate of $4,313.4 million [1]. - For the full year 2024, the company reported a loss of $1.57 per share, down from earnings of 78 cents the previous year, with total revenues declining about 12.8% to $19,185 million [3]. Operational Highlights - Steelmaking revenues for Q4 were $4,168 million, down around 15.8% year over year, missing the estimate of $4,198.3 million [2]. - The average net selling price per net ton of steel products was $976, down approximately 10.7% year over year, which also lagged behind the estimate of $985 [2]. - External sales volumes for steel products were approximately 3.83 million net tons, down around 5.2% year over year, but slightly beating the estimate of 3.82 million net tons [2]. Financial Position - At the end of Q4, cash and cash equivalents stood at $54 million, down from $198 million in the prior-year quarter [4]. - Long-term debt increased by 125.2% year over year to $7,065 million [4]. - Net cash used by operating activities was $472 million in Q4 2024 [4]. Outlook - The company anticipates a reduction of about $40 per net ton in steel unit costs for 2025 compared to 2024 [5]. - Projected capital expenditures for the upcoming year are around $700 million, with selling, general and administrative expenses expected to reach approximately $625 million [5]. - Depreciation, depletion, and amortization expenses are forecasted at roughly $1.1 billion, and cash pension and other post-employment benefits payments are projected to be around $150 million [5]. Price Performance - Shares of Cleveland-Cliffs Inc. have declined by 45% over the past year, contrasting with a 5.3% decline in its industry [6].

CLEVELAND-CLIFFS INC. Full-Year and Fourth-Quarter 2024 Earnings Presentation February 24, 2025 © 2025 Cleveland-Cliffs Inc. All Rights Reserved. FORWARD-LOOKING STATEMENTS This presentation contains statements that constitute "forward-looking statements" within the meaning of the federal securities laws. As a general matter, forward-looking statements relate to anticipated trends and expectations rather than historical matters. Forward-looking statements are subject to uncertainties and factors relating to ...

Group 1: Earnings Performance - Cleveland-Cliffs reported a quarterly loss of $0.68 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.65, and compared to a loss of $0.05 per share a year ago, indicating a significant decline in performance [1] - The company posted revenues of $4.33 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.27%, but down from $5.11 billion in the same quarter last year [2] - Over the last four quarters, Cleveland-Cliffs has only surpassed consensus EPS estimates once [2] Group 2: Stock Performance and Outlook - Cleveland-Cliffs shares have increased approximately 20.8% since the beginning of the year, outperforming the S&P 500's gain of 2.2% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the coming quarter is -$0.38 on revenues of $4.74 billion, and -$0.48 on revenues of $20.15 billion for the current fiscal year [7] Group 3: Industry Context - The Mining - Miscellaneous industry, to which Cleveland-Cliffs belongs, is currently ranked in the bottom 28% of over 250 Zacks industries, indicating a challenging environment [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Cleveland-Cliffs' stock performance [5] - The unfavorable trend in estimate revisions has resulted in a Zacks Rank 5 (Strong Sell) for Cleveland-Cliffs, suggesting expected underperformance in the near future [6]

Core Viewpoint - Cleveland-Cliffs Inc. (CLF) is expected to report a decline in fourth-quarter 2024 results, influenced by lower steel prices and reduced volumes despite cost-cutting measures [2][4]. Revenue Estimates - The Zacks Consensus Estimate for CLF's fourth-quarter consolidated revenues is $4,313.4 million, indicating a year-over-year decline of 15.6% [4]. Factors Impacting Performance - CLF is anticipated to face challenges from weaker U.S. steel prices, which have dropped over 40% from $1,200 per short ton at the beginning of 2024 due to reduced demand and oversupply [5]. - The average net selling price per net ton of steel products is estimated at $985, reflecting a roughly 10% year-over-year decrease [6]. - External sales volumes for steel products are projected at 3.81 million net tons, suggesting a 5.5% year-over-year decline [8]. Cost Management and Acquisitions - Despite the challenges, CLF is expected to benefit from actions taken to lower steelmaking unit costs, which may support its margins [8]. - The acquisition of Stelco Holdings Inc. on November 1, 2024, is expected to contribute positively to the fourth-quarter results [9]. Earnings Predictions - The Earnings ESP for CLF is -2.80%, with the consensus estimate for earnings indicating a loss of 64 cents for the fourth quarter [11]. - CLF currently holds a Zacks Rank of 5 (Strong Sell), suggesting a low probability of an earnings beat this season [10][11].

Company Performance - Cleveland-Cliffs (CLF) closed at $11.98, reflecting a +1.1% change from the previous trading day's close, outperforming the S&P 500's daily loss of 0.43% [1] - Over the past month, shares of Cleveland-Cliffs have gained 21.91%, significantly surpassing the Basic Materials sector's gain of 3.69% and the S&P 500's gain of 2.6% [1] Earnings Forecast - Cleveland-Cliffs is expected to release its earnings on February 24, 2025, with a predicted EPS of -$0.64, indicating a 1180% decline compared to the same quarter last year [2] - The consensus estimate for revenue is $4.31 billion, reflecting a 15.62% decrease compared to the same quarter of the previous year [2] Analyst Estimates - Recent adjustments to analyst estimates for Cleveland-Cliffs indicate changing near-term business trends, with positive revisions suggesting analyst optimism regarding the company's business and profitability [3] - The Zacks Rank system, which evaluates these estimate changes, currently ranks Cleveland-Cliffs at 5 (Strong Sell), following a 126.95% fall in the Zacks Consensus EPS estimate over the past month [5] Industry Context - Cleveland-Cliffs operates within the Mining - Miscellaneous industry, which is part of the Basic Materials sector, currently holding a Zacks Industry Rank of 173, placing it in the bottom 32% of over 250 industries [6] - The Zacks Industry Rank assesses the strength of industry groups based on the average Zacks Rank of individual stocks, with top-rated industries outperforming the bottom half by a factor of 2 to 1 [6]

Core Viewpoint - Analysts forecast that Cleveland-Cliffs (CLF) will report a quarterly loss of $0.58 per share, indicating a year-over-year decline of 1060% and anticipated revenues of $4.31 billion, reflecting a 15.6% decrease compared to the previous year [1] Earnings Estimates - The consensus EPS estimate has been revised 22.9% lower over the last 30 days, indicating a collective reevaluation by analysts [2] - Changes in earnings estimates are crucial for predicting investor reactions, with empirical studies showing a strong relationship between earnings estimate revisions and short-term stock performance [3] Revenue Projections - Analysts predict 'Revenues- Other Businesses' at $154.30 million, suggesting a year-over-year change of -2.3% [5] - 'Revenues- Steelmaking' is expected to reach $4.23 billion, indicating a year-over-year decline of -14.7% [5] - 'Revenues- Steelmaking- Coated steel' is forecasted at $1.38 billion, reflecting an -8.3% change from the previous year [5] - 'Revenues- Steelmaking- Slab and other steel products' is estimated at $243.21 million, suggesting a -22.6% year-over-year change [6] Sales Volumes - 'External Sales Volumes- Steel Products' is projected at 3,819.69 tons, down from 4,039 tons in the previous year [6] - 'Volumes - Steelmaking - Coated steel' is expected to be 1,110.18 tons, compared to 1,140 tons reported last year [7] - 'Volumes - Steelmaking - Slab and other steel products' is estimated at 344.40 tons, down from 473 tons in the same quarter last year [8] - 'Volumes - Steelmaking - Plate' is projected at 172.51 tons, compared to 213 tons reported last year [8] - 'Volumes - Steelmaking - Cold-rolled steel' is expected to reach 568.06 tons, down from 583 tons [9] - 'Volumes - Steelmaking - Hot-rolled steel' is projected at 1,453.94 tons, compared to 1,472 tons last year [9] - 'Volumes - Steelmaking - Stainless and electrical steel' is expected to reach 167.96 tons, slightly up from 158 tons reported last year [10] Market Performance - Over the past month, shares of Cleveland-Cliffs have returned +11.8%, outperforming the Zacks S&P 500 composite's +4.7% change [11] - Currently, CLF carries a Zacks Rank 5 (Strong Sell), indicating potential underperformance in the near future [11]

Core Viewpoint - Cleveland-Cliffs (CLF) is anticipated to report a significant year-over-year decline in earnings due to lower revenues, with a consensus EPS estimate indicating a loss of $0.58 per share, reflecting a -1060% change compared to the previous year [1][3]. Earnings Expectations - The upcoming earnings report is scheduled for February 24, and the stock may experience upward movement if the reported numbers exceed expectations, while a miss could lead to a decline [2]. - Revenues for the quarter are projected to be $4.31 billion, which is a decrease of 15.6% from the same quarter last year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised down by 22.93%, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4]. - The Most Accurate Estimate for Cleveland-Cliffs is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -14.45%, which complicates the prediction of an earnings beat [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive or negative reading indicates the likely deviation of actual earnings from the consensus estimate, with a strong predictive power for positive readings [7][8]. - Cleveland-Cliffs currently holds a Zacks Rank of 5 (Strong Sell), which further diminishes the likelihood of beating the consensus EPS estimate [11]. Historical Performance - In the last reported quarter, Cleveland-Cliffs was expected to post a loss of $0.31 per share but actually reported a loss of $0.33, resulting in a surprise of -6.45% [12]. - Over the past four quarters, the company has only surpassed consensus EPS estimates once [13]. Industry Comparison - Teck Resources Ltd (TECK), another player in the mining industry, is expected to report earnings of $0.22 per share, reflecting a year-over-year decline of -78.4%, with revenues projected at $1.85 billion, down 38.5% from the previous year [17]. - The consensus EPS estimate for Teck Resources has also been revised down by 23.5% in the last 30 days, resulting in an Earnings ESP of -5.33% and a Zacks Rank of 3 (Hold) [18].

Core Viewpoint - Cleveland-Cliffs is experiencing a decline in projected earnings and revenue, with significant downward revisions in analyst estimates indicating challenges ahead for the company [2][5]. Group 1: Stock Performance - Cleveland-Cliffs closed at $11.48, reflecting a gain of 0.79% from the previous trading session, outperforming the S&P 500's loss of 0.01% [1]. - Over the past month, shares of Cleveland-Cliffs have appreciated by 9.31%, surpassing the Basic Materials sector's gain of 7.95% and the S&P 500's gain of 4.88% [1]. Group 2: Financial Projections - The upcoming earnings announcement is scheduled for February 24, 2025, with an expected EPS of -$0.56, representing a 1020% decline compared to the same quarter last year [2]. - Revenue is projected to be $4.31 billion, indicating a 15.62% decline compared to the corresponding quarter of the prior year [2]. Group 3: Analyst Estimates - Recent changes in analyst estimates for Cleveland-Cliffs show a downward revision of 124.78% in the Zacks Consensus EPS estimate over the past month [5]. - The company currently holds a Zacks Rank of 5 (Strong Sell), reflecting negative sentiment among analysts regarding its business operations and profit generation capabilities [5]. Group 4: Industry Context - Cleveland-Cliffs operates within the Mining - Miscellaneous industry, which is part of the Basic Materials sector, holding a Zacks Industry Rank of 162, placing it in the bottom 36% of over 250 industries [6]. - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1, suggesting challenges for the Mining - Miscellaneous industry [6].

Group 1 - The article discusses the author's return to writing after a hiatus of one to two years, indicating a renewed focus on investment analysis [2] - The author has previously written over 150 articles for Seeking Alpha, showcasing extensive experience in investment commentary [2] Group 2 - The article emphasizes that past performance is not indicative of future results, highlighting the inherent uncertainty in investment outcomes [2] - It clarifies that no specific investment recommendations are being made, underscoring the importance of individual investor suitability [2]