Cleveland-Cliffs (CLF) Down 5.6% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Cleveland-Cliffs (CLF). Shares have lost about 5.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Cleveland-Cliffs due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Cleveland-Cliffs’ Earnings & Revenues Lag Estimates in Q1

Cleveland-Cliffs reported a net loss of $53 million or 14 cents per share in the first quarter of 2024, compared with a loss of $42 million or 11 cents a year ago.

Adjusted earnings were 18 cents per share against a loss of 11 cents in the same quarter of the previous year. The figure fell short of the Zacks Consensus Estimate of 19 cents.

Revenues dropped around 1.8% from the year-ago quarter’s levels to $5,199 million. The top line missed the Zacks Consensus Estimate of $5,293.6 million.

Operational Highlights

The company reported Steelmaking revenues of $5,027 million in the first quarter, down around 2% year over year.

The average net selling price per net ton of steel products was $1,175 in the quarter, up around 4.1% year over year. It was below our estimate of $1,200. External sales volumes for steel products were nearly 3.94 million net tons, down around 3.5% year over year. It was below our estimate of 4.08 million net tons.

Financial Position

Cleveland-Cliffs ended the first quarter with cash and cash equivalents of $30 million, down from $59 million in the prior-year quarter. Long-term debt declined 19.6% year over year to $3,664 million.

Net cash provided by operating activities was $142 million in the first quarter of 2024.

Outlook

The company maintained its 2024 guidance, projecting steel shipment volumes of 16.5 million net tons. It also anticipates a $30 reduction per net ton in steel unit costs, resulting in an expected $500 million benefit in Adjusted EBITDA compared to 2023. The company estimates capital expenditures in the range of $675-$725 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -78.79% due to these changes.

VGM Scores

Currently, Cleveland-Cliffs has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Cleveland-Cliffs has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Free – 5 Dividend Stocks to Fund Your Retirement

Zacks Investment Research has released a Special Report to help you prepare for retirement with 5 diverse stocks that pay whopping dividends. They cut across property management, upscale outlets, financial institutions, and a couple of strong energy producers.

5 Dividend Stocks to Include in Your Retirement Strategy is packed with unconventional wisdom and insights you won’t get from your neighborhood financial planner.

Download Now – Today It’s FREE >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Cleveland-Cliffs Inc. (CLF) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.