Cleveland-Cliffs Facing Earnings Loss Amid Soft Steel Demand

Cleveland-Cliffs (NYSE: CLF) is expected to report a loss of $0.83 per share due to declining steel prices and reduced demand in key sectors. With revenues estimated at $5.2 billion, the company is navigating a challenging market environment that could impact its stock performance.

Date: 06-05-2025

AI Rating: 4

Market Challenges for Cleveland-Cliffs

Cleveland-Cliffs is on the brink of reporting its earnings, anticipating a significant negative impact on both revenue and profit margins. Expected earnings loss of $0.83 per share, alongside projected revenues of $5.2 billion, indicates heightened pressure on the company due to declining steel prices and weakening demand in crucial segments such as automotive and construction.

The report mentions substantial operational losses, specifically $504 million, and a net loss of $754 million, which directly points to deteriorating profit margins. The consistent drop in hot-rolled coil (HRC) prices, reported at $665 per ton, alongside rising inventory and shorter lead times, calls for investor caution. These factors highlight a turbulent market environment that could continue to restrict Cleveland-Cliffs' ability to return to profitability.

Investor Outlook

The current financial metrics paint a troubling picture for investors over a holding period of one to three months. The significant losses combined with an upsurge in inventory raise concerns about operational efficiency and demand stability. These elements, if not addressed promptly, can deter potential investors and depress stock prices further. Furthermore, the last few years of earnings history show a slight tendency toward positive post-earnings returns, but the overall context suggests a more cautious trading approach for Cleveland-Cliffs stock in light of these anticipated losses.

Stocks: CLF