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The company’s earnings missed the Zacks Consensus Estimate in three of the last four quarters, while beat once. It has a trailing four-quarter negative earnings surprise of roughly 7.8%, on average. The company posted a negative earnings surprise of around 35.6% in the last reported quarter.
CLF is likely to have gained from strong automotive shipments and lower energy and raw material costs in the fourth quarter. However, weaker steel prices are expected to have weighed on its performance.
The stock has gained 5% in a year’s time compared with the industry’s 9.3% 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 fourth-quarter consolidated revenues for Cleveland-Cliffs is currently pegged at $5,347 million, flat year over year.
The Zacks Consensus Estimate for Steelmaking revenues currently stands at $5,155 million, suggesting a decline of 6.5% on a sequential comparison basis.
Some Factors to Watch For
Cleveland-Cliffs is expected to have gained from lower raw material, energy and maintenance costs in the December quarter. Lower costs are likely to have supported margins in its Steelmaking unit.
The company is also expected to have benefited from healthy end-market demand for steel in the quarter, notwithstanding the softening of domestic steel prices. 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. Cleveland-Cliffs witnessed a significant improvement in shipments to its automotive customers in the third quarter and the momentum is likely to have continued in the fourth quarter.
U.S. steel prices tumbled after surging to roughly $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 cratered to near the $600 per short ton level in November 2022. The downward drift partly reflects weaker demand. 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.
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 -10.61%. The Zacks Consensus Estimate for fourth-quarter earnings is currently pegged at a loss of 33 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 #1 (Strong Buy).
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:
The Zacks Consensus Estimate for Albemarle’s fourth-quarter earnings has been revised 2.6% upward in the past 60 days. The Zacks Consensus Estimate for ALB’s earnings for the quarter is pegged at $7.89.
Quaker Chemical Corporation (KWR - Free Report) , slated to release earnings on Feb 23, has an Earnings ESP of +7.38%.
The Zacks Consensus Estimate for Quaker Chemical’s fourth-quarter earnings is currently pegged at $1.22. KWR currently carries a Zacks Rank #2.
Teck Resources Limited (TECK - Free Report) , scheduled to release earnings on Feb 21, has an Earnings ESP of +6.78%.
The Zacks Consensus Estimate for Teck Resources’ fourth-quarter earnings is currently pegged at 95 cents. TECK currently carries a Zacks Rank #2.
Image: Bigstock
Cleveland-Cliffs (CLF) to Post Q4 Earnings: What's in Store?
Cleveland-Cliffs Inc. (CLF - Free Report) is slated to release fourth-quarter 2022 results before the opening bell on Feb 14.
The company’s earnings missed the Zacks Consensus Estimate in three of the last four quarters, while beat once. It has a trailing four-quarter negative earnings surprise of roughly 7.8%, on average. The company posted a negative earnings surprise of around 35.6% in the last reported quarter.
CLF is likely to have gained from strong automotive shipments and lower energy and raw material costs in the fourth quarter. However, weaker steel prices are expected to have weighed on its performance.
The stock has gained 5% in a year’s time compared with the industry’s 9.3% 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 fourth-quarter consolidated revenues for Cleveland-Cliffs is currently pegged at $5,347 million, flat year over year.
The Zacks Consensus Estimate for Steelmaking revenues currently stands at $5,155 million, suggesting a decline of 6.5% on a sequential comparison basis.
Some Factors to Watch For
Cleveland-Cliffs is expected to have gained from lower raw material, energy and maintenance costs in the December quarter. Lower costs are likely to have supported margins in its Steelmaking unit.
The company is also expected to have benefited from healthy end-market demand for steel in the quarter, notwithstanding the softening of domestic steel prices. 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. Cleveland-Cliffs witnessed a significant improvement in shipments to its automotive customers in the third quarter and the momentum is likely to have continued in the fourth quarter.
U.S. steel prices tumbled after surging to roughly $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 cratered to near the $600 per short ton level in November 2022. The downward drift partly reflects weaker demand. 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.
Cleveland-Cliffs Inc. Price and EPS Surprise
Cleveland-Cliffs Inc. price-eps-surprise | Cleveland-Cliffs 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 -10.61%. The Zacks Consensus Estimate for fourth-quarter earnings is currently pegged at a loss of 33 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 #1 (Strong Buy).
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) , slated to release earnings on Feb 15, has an Earnings ESP of +7.16% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Albemarle’s fourth-quarter earnings has been revised 2.6% upward in the past 60 days. The Zacks Consensus Estimate for ALB’s earnings for the quarter is pegged at $7.89.
Quaker Chemical Corporation (KWR - Free Report) , slated to release earnings on Feb 23, has an Earnings ESP of +7.38%.
The Zacks Consensus Estimate for Quaker Chemical’s fourth-quarter earnings is currently pegged at $1.22. KWR currently carries a Zacks Rank #2.
Teck Resources Limited (TECK - Free Report) , scheduled to release earnings on Feb 21, has an Earnings ESP of +6.78%.
The Zacks Consensus Estimate for Teck Resources’ fourth-quarter earnings is currently pegged at 95 cents. TECK currently carries a Zacks Rank #2.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.