Cleveland-Cliffs (NYSE:CLF) Issues Quarterly Earnings Results

Cleveland-Cliffs (NYSE:CLF) issued its quarterly earnings results on Thursday. The mining company reported ($0.20) EPS for the quarter, topping the consensus estimate of ($0.21) by $0.01, FiscalAI reports. The company had revenue of $5.23 billion during the quarter, compared to analyst estimates of $5.15 billion. Cleveland-Cliffs had a negative net margin of 6.42% and a negative return on equity of 15.48%. The firm’s revenue was up 5.9% compared to the same quarter last year. During the same quarter in the previous year, the firm earned ($0.50) EPS.

Here are the key takeaways from Cleveland-Cliffs’ conference call:

• Cleveland-Cliffs said Q2 adjusted EBITDA rose to $286 million, free cash flow turned positive again, and management expects a much stronger second half with Q3 EBITDA guidance of $575 million and further improvement in Q4.
• Executives pointed to rising steel prices, higher shipment volumes, and lower unit costs as the main drivers of near-term improvement, with Q3 shipments expected to top 4.3 million tons and costs expected to decline sequentially.
• Management said the company is benefiting from a strong automotive backdrop, including higher auto shipments, improved finishing line utilization, and top supplier awards from Toyota and General Motors.
• The company reiterated that trade policy and domestic sourcing trends are supporting its outlook, while noting that upcoming contract resets in non-automotive and automotive markets should be priced meaningfully higher than last year.
• Cleveland-Cliffs highlighted plans to use cash flow and asset-sale proceeds to delever below 2.5x net leverage by next year, while also noting ongoing strategic discussions, including POSCO, and a constructive start to union contract negotiations.

Cleveland-Cliffs Trading Up 18.0%

Shares of Cleveland-Cliffs stock traded up $1.71 on Thursday, hitting $11.15. 10,932,576 shares of the company’s stock traded hands, compared to its average volume of 18,459,727. The company has a fifty day moving average of $11.25 and a two-hundred day moving average of $11.04. Cleveland-Cliffs has a one year low of $7.73 and a one year high of $16.70. The company has a market capitalization of $6.36 billion, a price-to-earnings ratio of -4.80 and a beta of 2.13. The company has a debt-to-equity ratio of 1.29, a current ratio of 2.02 and a quick ratio of 0.64.

Wall Street Analysts Forecast Growth

Several equities research analysts recently commented on the stock. Weiss Ratings reiterated a “sell (d-)” rating on shares of Cleveland-Cliffs in a research report on Friday, April 24th. KeyCorp assumed coverage on shares of Cleveland-Cliffs in a report on Wednesday, March 25th. They issued a “sector weight” rating for the company. Morgan Stanley reiterated an “equal weight” rating and set a $12.50 price objective (up from $12.00) on shares of Cleveland-Cliffs in a report on Monday, June 22nd. The Goldman Sachs Group reissued a “neutral” rating and set a $10.00 price objective on shares of Cleveland-Cliffs in a research report on Friday, May 1st. Finally, Barclays started coverage on Cleveland-Cliffs in a report on Thursday, May 21st. They set an “underweight” rating and a $9.00 price objective on the stock. Nine equities research analysts have rated the stock with a Hold rating and two have assigned a Sell rating to the company. Based on data from MarketBeat, Cleveland-Cliffs presently has a consensus rating of “Reduce” and an average target price of $11.50.

Insider Buying and Selling at Cleveland-Cliffs

In related news, EVP Celso L. Goncalves, Jr. sold 214,308 shares of the firm’s stock in a transaction that occurred on Friday, June 5th. The shares were sold at an average price of $13.41, for a total value of $2,873,870.28. Following the sale, the executive vice president directly owned 184,542 shares of the company’s stock, valued at $2,474,708.22. This trade represents a 53.73% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through the SEC website. Company insiders own 0.95% of the company’s stock.

Institutional Trading of Cleveland-Cliffs

Large investors have recently added to or reduced their stakes in the company. Los Angeles Capital Management LLC purchased a new position in Cleveland-Cliffs in the 4th quarter worth about $25,000. CIBC Private Wealth Group LLC grew its position in Cleveland-Cliffs by 306.1% in the fourth quarter. CIBC Private Wealth Group LLC now owns 2,461 shares of the mining company’s stock worth $33,000 after acquiring an additional 1,855 shares during the period. Caitong International Asset Management Co. Ltd boosted its holdings in Cleveland-Cliffs by 94.0% during the 4th quarter. Caitong International Asset Management Co. Ltd now owns 2,505 shares of the mining company’s stock valued at $33,000 after acquiring an additional 1,214 shares during the period. Larson Financial Group LLC raised its holdings in Cleveland-Cliffs by 819.2% in the third quarter. Larson Financial Group LLC now owns 2,684 shares of the mining company’s stock valued at $33,000 after acquiring an additional 2,392 shares in the last quarter. Finally, Johnson Financial Group Inc. increased its position in Cleveland-Cliffs by 2,935.8% during the fourth quarter. Johnson Financial Group Inc. now owns 3,309 shares of the mining company’s stock worth $44,000 after buying an additional 3,200 shares during the period. Institutional investors own 67.68% of the company’s stock.

About Cleveland-Cliffs

Cleveland-Cliffs Inc is a leading North American producer of iron ore pellets and flat-rolled steel products. Tracing its roots to 1847, the company has evolved from an iron-ore mining concern in the Great Lakes region into a fully integrated steelmaker. Today, Cleveland-Cliffs operates iron ore mining complexes in Michigan and Minnesota as well as steelmaking and finishing facilities across the United States.

The company’s integrated platform begins with direct control of key raw materials, including iron ore and scrap, and extends through every stage of steel production.