Cleveland-Cliffs (CLF) Q3 Earnings and Sales Surpass Estimates
Cleveland-Cliffs Inc.’s CLF third-quarter 2023 adjusted earnings were 54 cents per share, up from 29 cents in the prior-year quarter. Earnings per share topped the Zacks Consensus Estimate of 44 cents.
Revenues fell 0.8% to $5,605 million in the quarter from the year-ago quarter’s levels. The top line beat the Zacks Consensus Estimate of $5,420.2 million.
Cleveland-Cliffs Inc. Price, Consensus and EPS Surprise
Cleveland-Cliffs Inc. price-consensus-eps-surprise-chart | Cleveland-Cliffs Inc. Quote
Operational Highlights
The company reported Steelmaking revenues of around $5.4 billion in the third quarter, down around 1.2% year over year.
The average net selling price per net ton of steel products was $1,203 in the quarter, down around 11.5% year over year. It was below our estimate of $1,257. External sales volumes for steel products were roughly 4.1 million net tons, up around 13.9% year over year. It lagged our estimate of 4.204 million net tons.
The company’s unit cost per ton of steel was down $165 per net ton compared with the year-ago quarter.
Financial Position
Cleveland-Cliffs ended the third quarter with cash and cash equivalents of $31 million, down around 44.6% year over year. Long-term debt declined 22.7% year over year to $3,458 million.
Net cash provided by operating activities was $767 million in third-quarter 2023.
Cleveland-Cliffs repurchased 3.9 million shares during the third quarter. It recorded a free cash flow of $605 million for the quarter.
Outlook
The company anticipates achieving an additional $15 per net ton reduction in steel unit costs from the third quarter to the fourth, with further cost savings expected in 2024. In the fourth quarter of 2023, it projects that working capital will substantially impact free cash flow.
Cliffs revised its full-year 2023 capital expenditure forecast to $670 million, a decrease from the midpoint of the earlier guidance range of $700 million.
Price Performance
Shares of CLF are up 0.8% in the past year compared with a 14.4% rise of its industry.
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Zacks Rank & Other Key Picks
Cleveland-Cliffs currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are WestRock Company WRK, The Andersons Inc. ANDE and Koppers Holdings Inc. KOP, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, the Zacks Consensus Estimate for WestRock’s current fiscal year has been revised upward by 5.2%. WRK beat the Zacks Consensus Estimate in three of the last four quarters while missing in one quarter, with the average earnings surprise being 30.7%. The company’s shares have rallied 1.5% in the past year.
The Zacks Consensus Estimate for ANDE's current-year earnings has been revised 3.3% upward in the past 90 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4% on average. ANDE shares have rallied around 37.3% in a year.
The consensus estimate for Koppers’ current fiscal year earnings is pegged at $4.45, indicating year-over-year growth of 7.5%. KOP beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 21.7%. The company’s shares have surged 47.8% in the past year.
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