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Cleveland-Cliffs (CLF) Up 55.6% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Cleveland-Cliffs (CLF - Free Report) . Shares have added about 55.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cleveland-Cliffs due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Cleveland-Cliffs' Q1 Earnings Beat, Sales Miss Estimates
Cleveland-Cliffs has reported a net loss of $48.6 million or 18 cents in first-quarter 2020, wider than a loss of $22.1 million or 8 cents in the prior-year quarter.
Barring one-time items, adjusted earnings came in at 4 cents per share, which beat the Zacks Consensus Estimate of a loss of 18 cents.
Revenues surged 128.7% year over year to $359.1 million. However, the figure trailed the Zacks Consensus Estimate of $367.8 million.
Operational Highlights
Mining and pelletizing pellet production and sales volume were 4.8 million long tons and 2.1 million long tons in the first quarter, up 9.8% and 37.7% year over year, respectively. The increase in sales volumes was due to higher intercompany sales.
Realized revenues per long ton rose 6.1% year over year to $99.53.
Cash cost of goods sold rate per long ton fell 0.4% year over year to $61.67.
Financial Position
As of Mar 31, 2020, Cleveland-Cliffs had cash and cash equivalents of $186.9 million, down from $430.2 million as of Mar 31, 2019. Long-term debt was $4,357.1 million at the end of the first quarter, up 108.8% year over year.
Net cash used in operating activities was $160.5 million in the first quarter, up 44.3% year over year.
Outlook
Cleveland-Cliffs stated that if the automotive manufacturers continue to restart production as they have indicated to the company, its operations will normalize throughout the rest of the second quarter.
Management plans to restart HBI construction as quickly as possible. The company noted that the coronavirus pandemic and related production stoppages have created a significant scarcity of scrap in the marketplace. This has further increased demand and value of its HBI.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -10.35% due to these changes.
VGM Scores
At this time, Cleveland-Cliffs has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Cleveland-Cliffs has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Cleveland-Cliffs (CLF) Up 55.6% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Cleveland-Cliffs (CLF - Free Report) . Shares have added about 55.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cleveland-Cliffs due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Cleveland-Cliffs' Q1 Earnings Beat, Sales Miss Estimates
Cleveland-Cliffs has reported a net loss of $48.6 million or 18 cents in first-quarter 2020, wider than a loss of $22.1 million or 8 cents in the prior-year quarter.
Barring one-time items, adjusted earnings came in at 4 cents per share, which beat the Zacks Consensus Estimate of a loss of 18 cents.
Revenues surged 128.7% year over year to $359.1 million. However, the figure trailed the Zacks Consensus Estimate of $367.8 million.
Operational Highlights
Mining and pelletizing pellet production and sales volume were 4.8 million long tons and 2.1 million long tons in the first quarter, up 9.8% and 37.7% year over year, respectively. The increase in sales volumes was due to higher intercompany sales.
Realized revenues per long ton rose 6.1% year over year to $99.53.
Cash cost of goods sold rate per long ton fell 0.4% year over year to $61.67.
Financial Position
As of Mar 31, 2020, Cleveland-Cliffs had cash and cash equivalents of $186.9 million, down from $430.2 million as of Mar 31, 2019. Long-term debt was $4,357.1 million at the end of the first quarter, up 108.8% year over year.
Net cash used in operating activities was $160.5 million in the first quarter, up 44.3% year over year.
Outlook
Cleveland-Cliffs stated that if the automotive manufacturers continue to restart production as they have indicated to the company, its operations will normalize throughout the rest of the second quarter.
Management plans to restart HBI construction as quickly as possible. The company noted that the coronavirus pandemic and related production stoppages have created a significant scarcity of scrap in the marketplace. This has further increased demand and value of its HBI.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -10.35% due to these changes.
VGM Scores
At this time, Cleveland-Cliffs has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Cleveland-Cliffs has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.