Key Takeaways
- Reports Q1 adjusted Ebitda of $95 million, beating the $92 million consensus.
- Shares fall 2.1% as investors weigh a delayed partnership deal with POSCO.
- CEO credits US trade policy for boosting steel prices to $1,100 per ton.
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Cleveland-Cliffs stock falls 2.1% despite earnings beat on tariff boost
Cleveland-Cliffs Inc. (NYSE: CLF) reported first-quarter adjusted Ebitda of $95 million, beating Wall Street estimates as US trade enforcement helped lift steel prices.
"Trade enforcement in the United States is working exactly as intended, with steel imports at their lowest levels since the global financial crisis,” CEO Lourenco Goncalves said in a news release.
The steelmaker’s adjusted Ebitda of $95 million surpassed the $92 million consensus estimate, a significant improvement from the $174 million Ebitda loss reported in the same quarter a year ago. The result included an $80 million one-time energy cost impact from extreme cold weather.
Despite the earnings beat, shares fell 2.1% to close at $9.73. The negative sentiment may be linked to a delay in a planned partnership with Korean steelmaker POSCO, which was affected by Middle East turmoil. Cliffs said it still expects to finalize the deal by the end of the second quarter.
The company's performance was bolstered by strong domestic steel prices, with hot-rolled coil currently at approximately $1,100 per ton, up from below $700 per ton before tariffs were implemented. Goncalves praised recent modifications to trade rules in April, which apply a 25% flat fee on the full value of certain imported products made of steel and aluminum.
“These results are very weak but backward looking and should be a lot better in 2Q,” Citi analyst Alexander Hacking wrote in a report.
Cleveland-Cliffs maintained its full-year guidance, expecting total shipments of 16.5 million to 17.0 million tons and capital spending of about $700 million.
The results show the positive impact of protectionist trade measures on domestic steel producers, but the negative stock reaction highlights investor concern over operational timelines. Investors will watch for the POSCO deal finalization by the end of Q2 for the next major catalyst.
This article is for informational purposes only and does not constitute investment advice.
