Cleveland-Cliffs (NYSE:CLF) Releases Quarterly Earnings Results, Beats Expectations By $0.01 EPS

Cleveland-Cliffs (NYSE:CLF) announced its earnings results on Thursday. The mining company reported ($0.20) EPS for the quarter, beating analysts’ consensus estimates of ($0.21) by $0.01, FiscalAI reports. The company had revenue of $5.23 billion during the quarter, compared to analysts’ expectations of $5.15 billion. Cleveland-Cliffs had a negative return on equity of 15.48% and a negative net margin of 6.42%.Cleveland-Cliffs’s revenue for the quarter was up 5.9% on a year-over-year basis. During the same period last year, the business posted ($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 Stock Up 17.7%

Shares of NYSE:CLF traded up $1.68 during trading on Thursday, hitting $11.12. 25,962,083 shares of the company were exchanged, compared to its average volume of 18,550,404. The firm’s 50 day moving average price is $11.25 and its 200-day moving average price is $11.04. Cleveland-Cliffs has a 12-month low of $7.73 and a 12-month high of $16.70. The company has a debt-to-equity ratio of 1.29, a current ratio of 2.02 and a quick ratio of 0.64. The stock has a market capitalization of $6.35 billion, a P/E ratio of -4.71 and a beta of 2.13.

Insider Activity at Cleveland-Cliffs

In related news, EVP Celso L. Goncalves, Jr. sold 214,308 shares of Cleveland-Cliffs stock in a transaction on Friday, June 5th. The shares were sold at an average price of $13.41, for a total transaction of $2,873,870.28. Following the sale, the executive vice president directly owned 184,542 shares in the company, valued at $2,474,708.22. This trade represents a 53.73% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. 0.95% of the stock is owned by company insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently added to or reduced their stakes in CLF. Focus Partners Wealth purchased a new position in shares of Cleveland-Cliffs during the first quarter worth approximately $339,000. Prudential Financial Inc. raised its stake in Cleveland-Cliffs by 27.4% during the 2nd quarter. Prudential Financial Inc. now owns 49,955 shares of the mining company’s stock valued at $380,000 after acquiring an additional 10,733 shares during the last quarter. Russell Investments Group Ltd. lifted its position in Cleveland-Cliffs by 4.4% during the 2nd quarter. Russell Investments Group Ltd. now owns 143,264 shares of the mining company’s stock worth $1,088,000 after acquiring an additional 6,073 shares during the period. CW Advisors LLC lifted its position in Cleveland-Cliffs by 47.4% during the 2nd quarter. CW Advisors LLC now owns 22,167 shares of the mining company’s stock worth $168,000 after acquiring an additional 7,127 shares during the period. Finally, Invesco Ltd. increased its holdings in shares of Cleveland-Cliffs by 20.3% in the second quarter. Invesco Ltd. now owns 3,081,241 shares of the mining company’s stock valued at $23,417,000 after purchasing an additional 520,120 shares during the period. Hedge funds and other institutional investors own 67.68% of the company’s stock.

Analyst Ratings Changes

A number of research analysts recently weighed in on CLF shares. Wells Fargo & Company dropped their price objective on shares of Cleveland-Cliffs from $14.00 to $9.00 and set an “equal weight” rating for the company in a report on Thursday, July 9th. Glj Research raised shares of Cleveland-Cliffs from a “sell” rating to a “hold” rating and raised their price target for the company from $9.03 to $15.01 in a research report on Tuesday, June 9th. Weiss Ratings restated a “sell (d-)” rating on shares of Cleveland-Cliffs in a research note on Friday, April 24th. Bank of America decreased their target price on Cleveland-Cliffs from $14.00 to $11.50 and set a “neutral” rating for the company in a report on Thursday, July 9th. Finally, Morgan Stanley restated an “equal weight” rating and set a $12.50 price target (up from $12.00) on shares of Cleveland-Cliffs in a report on Monday, June 22nd. Nine analysts have rated the stock with a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat, Cleveland-Cliffs currently has an average rating of “Reduce” and an average price target of $11.50.

Cleveland-Cliffs News Roundup

Here are the key news stories impacting Cleveland-Cliffs this week:

• Positive Sentiment: Cleveland-Cliffs reported second-quarter revenue of about $5.23 billion, topping estimates and rising year over year, while adjusted EPS of a $0.20 loss narrowly beat expectations. Cleveland-Cliffs (CLF) Reports Q2 Loss, Tops Revenue Estimates
• Positive Sentiment: The company’s outlook for the third quarter was stronger than expected, with investors focusing on improving profitability and management’s forecast for a meaningful increase in EBITDA. Cleveland-Cliffs shares jump as upbeat third-quarter forecast outweighs earnings miss (NYSE:CLF)
• Positive Sentiment: The board promoted CFO Celso Goncalves to President and CFO and added him to the board, a sign of leadership continuity and confidence in the company’s strategy. Cleveland-Cliffs Announces Promotion of Chief Financial Officer Celso Goncalves from Executive Vice President to President and Appointment to Board of Directors

Cleveland-Cliffs Company Profile

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.