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The company’s earnings beat the Zacks Consensus Estimate in two of the last four quarters, while missed twice. It has a trailing four-quarter earnings surprise of roughly 2.2%, on average.
The company posted a negative earnings surprise of around 2.2% in the last reported quarter. It is likely to have gained from healthy demand and contributions of AK Steel and ArcelorMittal USA acquisitions in the third quarter. However, weaker steel prices are expected to have weighed on its performance.
The stock has lost 36.5% in a year’s time compared with the industry’s 19.4% decline.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for the upcoming announcement.
What do the Estimates Say?
The Zacks Consensus Estimate for third-quarter consolidated revenues for Cleveland-Cliffs is currently pegged at $5,835 million, which calls for a decline of 2.7% year over year.
The Zacks Consensus Estimate for Steelmaking revenues currently stands at $5,585 million, suggesting a decline of 7.4% on a sequential comparison basis.
Some Factors to Watch For
Cleveland-Cliffs is expected to have gained from its acquisitions of AK Steel and ArcelorMittal USA, which might have had a positive impact on its third-quarter results. It is also expected to have benefited from healthy end-market demand for steel in the quarter, notwithstanding softening domestic steel pricing. It is likely to have witnessed improved volumes in the automotive market. The automotive recovery is likely to have supported its overall volumes in the quarter to be reported.
U.S. steel prices have witnessed a significant downward correction. After surging to nearly $1,500 per short ton in April 2022 due to supply concerns stemming from the Russia-Ukraine war, the benchmark hot-rolled coil ("HRC") prices have retreated and fallen below the $800 per short ton level. The downward drift partly reflects shorter lead times. Mills are also negotiating lower prices for new orders. Fears of a recession have also impacted prices.
The impacts of lower prices are likely to reflect on the company’s revenues and margins in the quarter to be reported. The company is also likely to have faced headwinds from higher costs in the third quarter, partly driven by higher energy and scrap costs.
Our proven model does not conclusively predict an earnings beat for Cleveland-Cliffs this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Cleveland-Cliffs is -22.43%. The Zacks Consensus Estimate for third-quarter earnings is currently pegged at 66 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Cleveland-Cliffs carries a Zacks Rank #5 (Strong Sell).
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Albemarle Corporation (ALB - Free Report) , scheduled to release earnings on Nov 2, has an Earnings ESP of +8.13% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Albemarle’s third-quarter earnings has been revised 9% upward in the past 60 days. The Zacks Consensus Estimate for ALB’s earnings for the quarter is pegged at $6.81.
Koppers Holdings Inc. (KOP - Free Report) , expected to release earnings on Nov 3, has an Earnings ESP of +2.28% and carries a Zacks Rank #2.
The Zacks Consensus Estimate for Koppers’ third-quarter earnings has been revised 2.6% upward in the past 60 days. The consensus estimate for KOP’s earnings for the quarter is currently pegged at $1.17.
FMC Corporation (FMC - Free Report) , scheduled to release earnings on Nov 1, has an Earnings ESP of +0.30%.
The Zacks Consensus Estimate for FMC' earnings for the third quarter is currently pegged at $1.11. FMC currently carries a Zacks Rank #3.
Image: Bigstock
Cleveland-Cliffs (CLF) to Post Q3 Earnings: What's in Store?
Cleveland-Cliffs Inc. (CLF - Free Report) is slated to release third-quarter 2022 results before the opening bell on Oct 25.
The company’s earnings beat the Zacks Consensus Estimate in two of the last four quarters, while missed twice. It has a trailing four-quarter earnings surprise of roughly 2.2%, on average.
The company posted a negative earnings surprise of around 2.2% in the last reported quarter. It is likely to have gained from healthy demand and contributions of AK Steel and ArcelorMittal USA acquisitions in the third quarter. However, weaker steel prices are expected to have weighed on its performance.
The stock has lost 36.5% in a year’s time compared with the industry’s 19.4% decline.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for the upcoming announcement.
What do the Estimates Say?
The Zacks Consensus Estimate for third-quarter consolidated revenues for Cleveland-Cliffs is currently pegged at $5,835 million, which calls for a decline of 2.7% year over year.
The Zacks Consensus Estimate for Steelmaking revenues currently stands at $5,585 million, suggesting a decline of 7.4% on a sequential comparison basis.
Some Factors to Watch For
Cleveland-Cliffs is expected to have gained from its acquisitions of AK Steel and ArcelorMittal USA, which might have had a positive impact on its third-quarter results. It is also expected to have benefited from healthy end-market demand for steel in the quarter, notwithstanding softening domestic steel pricing. It is likely to have witnessed improved volumes in the automotive market. The automotive recovery is likely to have supported its overall volumes in the quarter to be reported.
U.S. steel prices have witnessed a significant downward correction. After surging to nearly $1,500 per short ton in April 2022 due to supply concerns stemming from the Russia-Ukraine war, the benchmark hot-rolled coil ("HRC") prices have retreated and fallen below the $800 per short ton level. The downward drift partly reflects shorter lead times. Mills are also negotiating lower prices for new orders. Fears of a recession have also impacted prices.
The impacts of lower prices are likely to reflect on the company’s revenues and margins in the quarter to be reported. The company is also likely to have faced headwinds from higher costs in the third quarter, partly driven by higher energy and scrap costs.
ClevelandCliffs Inc. Price and EPS Surprise
ClevelandCliffs Inc. price-eps-surprise | ClevelandCliffs Inc. Quote
Zacks Model
Our proven model does not conclusively predict an earnings beat for Cleveland-Cliffs this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Cleveland-Cliffs is -22.43%. The Zacks Consensus Estimate for third-quarter earnings is currently pegged at 66 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Cleveland-Cliffs carries a Zacks Rank #5 (Strong Sell).
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Albemarle Corporation (ALB - Free Report) , scheduled to release earnings on Nov 2, has an Earnings ESP of +8.13% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Albemarle’s third-quarter earnings has been revised 9% upward in the past 60 days. The Zacks Consensus Estimate for ALB’s earnings for the quarter is pegged at $6.81.
Koppers Holdings Inc. (KOP - Free Report) , expected to release earnings on Nov 3, has an Earnings ESP of +2.28% and carries a Zacks Rank #2.
The Zacks Consensus Estimate for Koppers’ third-quarter earnings has been revised 2.6% upward in the past 60 days. The consensus estimate for KOP’s earnings for the quarter is currently pegged at $1.17.
FMC Corporation (FMC - Free Report) , scheduled to release earnings on Nov 1, has an Earnings ESP of +0.30%.
The Zacks Consensus Estimate for FMC' earnings for the third quarter is currently pegged at $1.11. FMC currently carries a Zacks Rank #3.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.