Cleveland-Cliffs earnings on deck as steel prices, costs collide
The other key focus is the potential POSCO partnership.
SEATTLE (Scrap Monster): Cleveland-Cliffs Inc. reports first-quarter results Monday before the market opens, with investors focused on whether surging steel prices can offset rising production costs that have pressured the steelmaker’s path back to profitability.
Analysts expect Cleveland-Cliffs to post a loss of 41 cents a share on revenue of $4.81 billion, representing a narrower loss than the 43-cent deficit reported in the fourth quarter while revenue would climb 12% sequentially. The consensus reflects expectations for improved volumes after a challenging 2025, though EPS estimates have declined 11% over the past two months as analysts grapple with rising input costs.
The stock trades at $9.72, up from its 52-week low of $5.63 but well below last year’s high of $16.70. Analysts maintain a neutral rating on shares with a mean price target of $11.74, implying 18% upside. Recent activity has been cautious—JPMorgan cut its target to $10 from $13 in mid-April, while Goldman Sachs and Wells Fargo both initiated or maintained Hold ratings with targets at or below $9.
The most immediate question is how Cleveland-Cliffs captured the recent steel price rally, with hot-rolled coil prices breaching $1,000 per ton in early April and reaching $1,083—the highest level since early 2024. Management previously guided to a $60-per-ton sequential increase in average selling prices for the first quarter, which would represent a meaningful boost to revenue realization.
Offsetting that tailwind are natural gas costs, which have trended 15% higher than 2024 averages. In late March, KeyBanc analyst Samuel McKinney noted that Cleveland-Cliffs sees steelmaking unit costs rising $35 per ton quarter-over-quarter versus its previous outlook of $20 per ton, equating to a roughly $60 million incremental headwind. How management addresses cost control will be critical given the company’s elevated leverage and need to generate cash flow.
The other key focus is the potential POSCO partnership. The South Korean steelmaker confirmed it remains in talks with Cleveland-Cliffs, with a definitive agreement targeted for the first half of 2026. Analysts view the deal as potentially accretive, though details remain scarce.
With domestic steel prices at multi-year highs but input cost pressures mounting, Monday’s report will test whether Cleveland-Cliffs can finally turn the corner after posting a net loss of $1.4 billion in 2025. The balance between pricing power and cost inflation will determine whether the company’s recovery narrative can gain traction or whether profitability remains elusive.
Courtesy: www.investing.com