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

Cleveland-Cliffs (NYSE:CLF) announced its quarterly earnings data on Thursday. The mining company reported ($0.20) EPS for the quarter, topping analysts’ consensus estimates of ($0.21) by $0.01, FiscalAI reports. The company had revenue of $5.23 billion during the quarter, compared to the consensus estimate of $5.15 billion. Cleveland-Cliffs had a negative return on equity of 15.48% and a negative net margin of 6.42%.The company’s quarterly revenue was up 5.9% on a year-over-year basis. During the same quarter last year, the company 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 Stock Up 18.0%

Shares of NYSE CLF traded up $1.71 during trading hours on Thursday, hitting $11.15. The company had a trading volume of 10,932,576 shares, compared to its average volume of 18,459,727. The stock has a market capitalization of $6.36 billion, a P/E ratio of -4.80 and a beta of 2.13. The firm’s 50 day moving average is $11.25 and its 200-day moving average is $11.04. Cleveland-Cliffs has a 1-year low of $7.73 and a 1-year high of $16.70. The company has a quick ratio of 0.64, a current ratio of 2.02 and a debt-to-equity ratio of 1.29.

Analysts Set New Price Targets

A number of equities research analysts recently issued reports on CLF shares. The Goldman Sachs Group reiterated a “neutral” rating and set a $10.00 target price on shares of Cleveland-Cliffs in a research report on Friday, May 1st. JPMorgan Chase & Co. decreased their price objective on shares of Cleveland-Cliffs from $13.00 to $10.00 and set a “neutral” rating on the stock in a report on Wednesday, July 15th. Wells Fargo & Company dropped their target price on Cleveland-Cliffs from $14.00 to $9.00 and set an “equal weight” rating for the company in a research report on Thursday, July 9th. Argus raised shares of Cleveland-Cliffs to a “hold” rating in a report on Monday, April 6th. Finally, Barclays assumed coverage on shares of Cleveland-Cliffs in a research note on Thursday, May 21st. They set an “underweight” rating and a $9.00 price objective on the stock. Nine investment analysts have rated the stock with a Hold rating and two have given a Sell rating to the company. According to data from MarketBeat.com, Cleveland-Cliffs presently has an average rating of “Reduce” and a consensus target price of $11.50.

Insider Activity

In other news, EVP Celso L. Goncalves, Jr. sold 214,308 shares of Cleveland-Cliffs stock in a transaction that occurred on Friday, June 5th. The stock was sold at an average price of $13.41, for a total transaction of $2,873,870.28. Following the completion of the transaction, the executive vice president directly owned 184,542 shares in the company, valued at approximately $2,474,708.22. The trade was a 53.73% decrease in their position. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. 0.95% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Several large investors have recently bought and sold shares of CLF. Public Employees Retirement System of Ohio increased its holdings in Cleveland-Cliffs by 0.6% during the 3rd quarter. Public Employees Retirement System of Ohio now owns 152,009 shares of the mining company’s stock valued at $1,855,000 after purchasing an additional 943 shares during the period. Moors & Cabot Inc. boosted its stake in Cleveland-Cliffs by 3.0% during the 3rd quarter. Moors & Cabot Inc. now owns 33,118 shares of the mining company’s stock valued at $404,000 after purchasing an additional 960 shares during the last quarter. Rexford Capital Inc. grew its position in Cleveland-Cliffs by 11.8% in the 4th quarter. Rexford Capital Inc. now owns 9,500 shares of the mining company’s stock worth $126,000 after purchasing an additional 1,000 shares during the period. Caitong International Asset Management Co. Ltd increased its holdings in Cleveland-Cliffs by 94.0% during the fourth quarter. Caitong International Asset Management Co. Ltd now owns 2,505 shares of the mining company’s stock valued at $33,000 after buying an additional 1,214 shares during the last quarter. Finally, CIBC Private Wealth Group LLC raised its stake in shares of 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 buying an additional 1,855 shares during the period. 67.68% of the stock is owned by institutional investors.

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.