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Cleveland-Cliffs (CLF) Earnings Beat, Sales Down Y/Y in Q4
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Cleveland-Cliffs Inc. (CLF - Free Report) incurred a fourth-quarter 2022 loss of 41 cents per share against the year-ago quarter's earnings of $1.69.
Barring one-time items, the loss per share was 30 cents in the reported quarter, narrower than the Zacks Consensus Estimate of a loss of 33 cents.
The company’s net sales in the fourth quarter were $5,044 million, which decreased 5.6% from $5,346 million reported in the prior-year quarter. Performance in the fourth quarter was aided by the demand recovery in automotive markets. The company was also able to reduce its steelmaking unit costs in the quarter, which helped it to offset the impacts of the lower index pricing environment.
Cleveland-Cliffs Inc. Price, Consensus and EPS Surprise
Cleveland-Cliffs reported steelmaking revenues of $4,902 million in the fourth quarter, down 5.6% year over year. Average net selling price per net ton of steel products was $1,156 in the quarter, down 18.8%. External sales volumes for steel products were roughly 3,838 million net tons, up 13.4% year over year.
FY22 Results
Full-year 2022 earnings were $2.55 per share compared with $5.36 a year ago. Revenues climbed roughly 12.4% to a record $23 billion in the full year.
Financials
Cleveland-Cliffs ended the fourth quarter with cash and cash equivalents of $26 million, down around 46% year over year. Long-term debt declined roughly 19% to $4,249 million at the end of the fourth quarter.
Net cash provided in operating activities was $489 million in the reported quarter. Cleveland-Cliffs also repurchased 2 million shares during the fourth quarter.
Outlook
Moving ahead, CLF expects improved demand in its end markets, including automotive. The company expects its adjusted EBITDA to improve entering 2023 as its fixed price contracts reset higher, unit costs decline and sales volumes improve. The company renewed its fixed price contracts in December and now sees a year-over-year selling price increase of $115 per ton for its direct automotive business in 2023 from $100 per ton expected earlier.
Factoring in normalized repair and maintenance expense, higher production volume and lower input costs, the company expects its steelmaking cost of goods sold to reduce by roughly $2 billion in 2023. It expects a $50 per ton sequential decline in its steelmaking unit costs in the first quarter of 2023.
CLF anticipates its steel shipment volumes to be around 16 million tons for 2023, along with capital expenditure in the range of $700-$750 million for the year.
Price Performance
Cleveland-Cliffs’ shares have gained 2.8% in the past year against a 10.2% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Cleveland-Cliffs currently sports a Zacks Rank #1 (Strong Buy).
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Alpha Metallurgical topped Zacks Consensus Estimate in two of the last four quarters. It delivered a trailing four-quarter earnings surprise of 1.1% on average.
ATI’s shares have gained 65.2% in the past year. The Zacks Consensus Estimate for ATI’s current-year earnings has been revised 2.8% upward in the past 60 days. The company has an earnings growth rate of 10.1% for the current year.
ATI topped Zacks Consensus Estimate in all of the last four quarters. It delivered a trailing four-quarter earnings surprise of 32.4% on average.
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Cleveland-Cliffs (CLF) Earnings Beat, Sales Down Y/Y in Q4
Cleveland-Cliffs Inc. (CLF - Free Report) incurred a fourth-quarter 2022 loss of 41 cents per share against the year-ago quarter's earnings of $1.69.
Barring one-time items, the loss per share was 30 cents in the reported quarter, narrower than the Zacks Consensus Estimate of a loss of 33 cents.
The company’s net sales in the fourth quarter were $5,044 million, which decreased 5.6% from $5,346 million reported in the prior-year quarter. Performance in the fourth quarter was aided by the demand recovery in automotive markets. The company was also able to reduce its steelmaking unit costs in the quarter, which helped it to offset the impacts of the lower index pricing environment.
Cleveland-Cliffs Inc. Price, Consensus and EPS Surprise
Cleveland-Cliffs Inc. price-consensus-eps-surprise-chart | Cleveland-Cliffs Inc. Quote
Operational Highlights
Cleveland-Cliffs reported steelmaking revenues of $4,902 million in the fourth quarter, down 5.6% year over year. Average net selling price per net ton of steel products was $1,156 in the quarter, down 18.8%. External sales volumes for steel products were roughly 3,838 million net tons, up 13.4% year over year.
FY22 Results
Full-year 2022 earnings were $2.55 per share compared with $5.36 a year ago. Revenues climbed roughly 12.4% to a record $23 billion in the full year.
Financials
Cleveland-Cliffs ended the fourth quarter with cash and cash equivalents of $26 million, down around 46% year over year. Long-term debt declined roughly 19% to $4,249 million at the end of the fourth quarter.
Net cash provided in operating activities was $489 million in the reported quarter. Cleveland-Cliffs also repurchased 2 million shares during the fourth quarter.
Outlook
Moving ahead, CLF expects improved demand in its end markets, including automotive. The company expects its adjusted EBITDA to improve entering 2023 as its fixed price contracts reset higher, unit costs decline and sales volumes improve. The company renewed its fixed price contracts in December and now sees a year-over-year selling price increase of $115 per ton for its direct automotive business in 2023 from $100 per ton expected earlier.
Factoring in normalized repair and maintenance expense, higher production volume and lower input costs, the company expects its steelmaking cost of goods sold to reduce by roughly $2 billion in 2023. It expects a $50 per ton sequential decline in its steelmaking unit costs in the first quarter of 2023.
CLF anticipates its steel shipment volumes to be around 16 million tons for 2023, along with capital expenditure in the range of $700-$750 million for the year.
Price Performance
Cleveland-Cliffs’ shares have gained 2.8% in the past year against a 10.2% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Cleveland-Cliffs currently sports a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks to consider in the basic materials space include Alpha Metallurgical Resources, Inc. (AMR - Free Report) , ATI Inc. (ATI - Free Report) and Nucor Corporation (NUE - Free Report) . ATI and NUE currently sport a Zacks Rank #1, while AMR carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alpha Metallurgical’s shares have gained 94.5% in the past year. The Zacks Consensus Estimate for AMR’s current-year earnings has been revised 1.7% upward in the past 60 days. The company has an earnings growth rate of 425% for the current year.
Alpha Metallurgical topped Zacks Consensus Estimate in two of the last four quarters. It delivered a trailing four-quarter earnings surprise of 1.1% on average.
ATI’s shares have gained 65.2% in the past year. The Zacks Consensus Estimate for ATI’s current-year earnings has been revised 2.8% upward in the past 60 days. The company has an earnings growth rate of 10.1% for the current year.
ATI topped Zacks Consensus Estimate in all of the last four quarters. It delivered a trailing four-quarter earnings surprise of 32.4% on average.
Nucor’s shares have gained 39.7% in the past year. The Zacks Consensus Estimate for NUE’s current-year earnings has been revised 13% upward in the past 60 days.
Nucor topped Zacks Consensus Estimate in all of the last four quarters. It delivered a trailing four-quarter earnings surprise of 7.7% on average.