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Cleveland-Cliffs' (CLF) Q3 Earnings & Sales Surpass Estimates

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Cleveland-Cliffs Inc. (CLF - Free Report) logged profits of $1.3 billion or $2.33 per share in the third quarter of 2021, shooting up from $2 million or a loss of 2 cents in the prior-year quarter. Earnings per share beat the Zacks Consensus Estimate of $2.23.

Revenues were $6,004 million in the reported quarter, up more than threefold from $1,646 million in the prior-year quarter. The top line beat the Zacks Consensus Estimate of $5,649.1 million.

In the third quarter, the company extracted synergies from its modern, efficient, and unique footprint. Its results were also driven by price increases and strong volumes.

Operational Highlights

The company reported Steelmaking revenues of $5.9 billion in the third quarter.  The average net selling price per net ton of steel products was $1,334 in the quarter, up roughly 33% year over year. External sales volumes for steel products were roughly 4.2 million net tons, a nearly fourfold year-over-year increase.

Financial Position

Cleveland-Cliffs ended the third quarter with cash and cash equivalents of $42 million, falling from $56 million in the previous-year quarter. Long-term debt was $5,350 million at the end of the quarter, up around 24.1%.

Net cash provided by operating activities was $1,516 million in the third quarter.

Outlook

Moving ahead, Cleveland-Cliffs expects higher average sales price next year, which will further strengthen its balance sheet and profitability. It also looks forward to completing the acquisition of Ferrous Processing and Trading (“FPT”) Company, a leading prime scrap processor in the United States, in the fourth quarter. The integration of FPT is expected to enable it to utilize more prime scrap, thus reducing dependency on coke and lowering carbon emissions. It also completed the renewal of several annual fixed price sales contracts with a significant number of key customers.

Price Performance

Cleveland-Cliffs’ shares have surged 179.9% in the past year compared with 16.9% rise of the industry.

Zacks Investment ResearchImage Source: Zacks Investment Research

Zacks Rank & Other Stocks to Consider

Currently, Cleveland-Cliffs carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the basic material space include Glencore PLC (GLNCY - Free Report) , Brigham Mineral, Inc. (MNRL - Free Report) , and Nexa Resources S.A. (NEXA - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Glencore has a projected earnings growth rate of 330% for the current year. The company’s shares have grown 137.2% over a year.

Brigham has a projected earnings growth rate of 552.6% for the current year. The company’s shares have shot 154.6% over a year.

Nexa has a projected earnings growth rate of 147.6% for the current year. The company’s shares have surged 95.3% over a year.